Gold gains as dollar rally pauses, new virus cases mount

• Spot gold was up 0.4% at $1,702.96 per ounce by 1212 GMT. US gold futures rose 0.6% to $1,707.90 per ounce.

Gold prices rose on Tuesday as the dollar slipped from a more than two-week high, amid worries of a resurgence in coronavirus infections in some countries and lingering trade tensions between the United States and China.

Spot gold was up 0.4% at $1,702.96 per ounce by 1212 GMT. US gold futures rose 0.6% to $1,707.90 per ounce.

"We're seeing a little softness in the dollar this morning which is providing some support for gold," OANDA analyst Craig Erlam said.

"Broadly speaking, little has changed for gold. It continues to consolidate around $1,700 per ounce and has done so for weeks. There's little to suggest this is going to change in the near-term."

Offering some respite to gold, the dollar index fell 0.4% after earlier climbing to its highest in more than two- weeks.

The dollar is considered a safe store of value rivalling gold in times of economic and political uncertainty.

The mood in wider financial markets remained fragile, as the Chinese city of Wuhan, where the pandemic originated, reported new cases since its lockdown was lifted - raising concerns about a second wave of infections.

Markets are also keeping a wary eye on China's trade relations with the United States after President Donald Trump said he was not interested in re-negotiating the "Phase 1" trade deal.

"The spot price of gold is consolidating just above the threshold of $1,700 in a scenario where investors remain bullish on gold but require fresh stimuli to generate another rally," ActivTrades chief analyst Carlo Alberto De Casa said in a note.

Gold has risen over 12% so far this year as central banks around the world rolled out a wave of stimulus measures to limit economic damage caused by the coronavirus outbreak.

Globally, an estimated $15 trillion worth of stimulus has already been unleashed to cushion the blow from the pandemic, which has infected more than 4.19 million people around the world and killed 285,120.

Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.

Meanwhile, US Federal Reserve officials talked down the prospect of negative rates.

Among other precious metals, palladium dropped 0.9% to $1,878.34 per ounce and silver slipped 0.1% to $15.54, while platinum gained 1.8% to $770.47.