SINGAPORE: Gold ticked higher on Tuesday, hovering around the $1,300-an-ounce level, regaining ground from overnight losses as weaker equities and geopolitical tensions in Ukraine lifted its safe-haven appeal.
However, the metal struggled to make strong gains as physical demand in Asia was subdued and optimism about the US economic recovery continued to weigh on bullion investors.
Spot gold rose 0.3 percent to $1,300.04 an ounce by 0337 GMT. It fell 0.5 percent in the previous session as a short-covering rally after US jobs data fizzed out.
It briefly crossed $1,300 but was unable to hold above that level due to lack of strong bids, traders said.
"To the extent that investor pessimism overshadows the ongoing improvement in the US economy and equity benchmarks struggle to make headway, gold should continue to benefit from investment demand," said analysts at ETF Securities, a provider of exchange-traded funds.
Asian stocks slumped in early trading on Tuesday as Wall Street gloom cast a shadow over the session.
Risk appetite was also curbed by tensions in Ukraine, where pro-Moscow protesters seized arms in one city and declared a separatist republic in another, in moves Kiev described as part of a Russian-orchestrated plan to justify an invasion to dismember the country.
Gold, seen as an alternative investment, usually benefits from economic and geopolitical uncertainties.
Reuters' technical analyst said gold faces resistance at $1,304, a break above which will lead to further gain to $1,321.
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