LONDON: Gold slipped on Tuesday, as share markets rose and investors waited for U.S. economic data for directional cues, while platinum group metals were supported as labour strikes dragged on in major producer South Africa.
Developments in Ukraine, where air strikes and a paratrooper assault were launched against pro-Russian rebels who seized an airport on Monday, had little impact on gold, which is usually bought as an insurance against risk in times of global political uncertainty.
"The geopolitical situation could impact prices significantly but we need a big change in Ukraine to make a difference and at the moment it is boiling quietly," Sharps Pixley CEO Ross Norman said.
Spot gold fell 0.7 percent to $1,283.61 an ounce by 1015 GMT, after ending flat in the last two weeks. U.S. gold futures were down 0.6 percent at $1,284.20 an ounce.
Gold has struggled to break consistently above the $1,300-an-ounce level for the past two weeks, indicating a lack of conviction from investors and speculators, analysts said.
"The problem is that volatility is falling off the cliff, market volumes are particularly low, physical demand is very slow and you have this odd dichotomy where you have got technicals telling you...the market should be poised for a breakout and yet there is no drive and desire behind it," Norman said.
European equities were firmer on Tuesday, eroding gold's appeal as a hedge against riskier assets.
The metal failed to benefit from weakness in the dollar, which fell 0.2 percent against a basket of currencies, and a retreat in U.S. bond yields.
A weaker dollar makes gold cheaper for foreign investors, while returns from U.S. bonds are closely watched, given that the metal pays no interest.
Investors were holding off from taking big positions ahead of U.S. data on durable goods orders and consumer confidence, due to be released later in the day.
Market players were also eyeing developments in physical markets which have been subdued over the past several weeks.
China's gold imports from main conduit Hong Kong fell to a 14-month low of 67.040 tonnes in April from 85.128 tonnes in March, as a weaker yuan and local discounts curbed demand.
China has approached foreign banks and gold producers to participate in a global gold exchange in Shanghai, as the world's top producer and importer of the metal seeks greater influence over pricing.
In No. 2 consumer India, investors are hoping the new government would relax rules imposed on gold imports last year, a move they believe will spur pent-up demand.
Among other precious metals, platinum was down 0.3 percent at $1,466.50 an ounce and palladium dropped 0.2 percent to $828 an ounce.
Work stoppages continued at Anglo American Platinum , Impala Platinum and Lonmin in the longest strike in South Africa's history.
New South African mining minister Ngoako Ramatlhodi has pledged to mediate in the strike now in its fifth month and said the government needed to start treating the striking AMCU union with respect, local radio said on Tuesday.
Silver fell 0.8 percent to $19.26 an ounce.
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