Spot gold was little changed to $1,283.43 an ounce by 2:01 p.m. EST (1901 GMT), having fallen to $1,278 an ounce earlier in the session. US gold futures settled unchanged at $1,284. "Gold's strength is due to the weakness in equities continuing. People are starting to run towards gold as a safe haven," Michael Matousek, head trader at US Global Investors, said.
A respite to falling global equities earlier in the session proved only temporary, as a global index of stock markets turned negative when jitters over US politics and the state of the world economy eclipsed a boost from Wall Street's quarterly earnings reports.
Trade negotiations between the United States and China were also dealt a blow as Beijing vowed a response against Washington's decision to formally proceed with the extradition of Meng Wanzhou, Huawei's chief financial officer, currently detained in Canada.
"Renewed safe-haven buying and portfolio diversification as investors seek protection from market turbulences, potential recessions, and growing bearish sentiment," are supportive factors to gold's outlook, analysts at Societe Generale said in a note. Adding to gold's appeal was a falling dollar index, which touched a five-day low earlier in the session.
The dollar, which rose amidst trade tensions between the United States and China, overtook gold as investors' favoured hedge against uncertainties in 2018. However, analysts believe that the same is unlikely to happen this year, with a widely expected pause to the US Federal Reserve's rate hikes weighing on the currency.
Gold tends to gain on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion. "Another rationale for the weaker dollar is that the US national debt just keeps growing and gold appreciates alongside the US debt," Matousek said. Earlier this month, Fed Chairman Jerome Powell raised concerns about the size of the US debt. Reflecting investor appetite for gold, holdings of SPDR Gold, the largest gold-based ETF, was at its highest since June 2018.
Meanwhile, palladium, which hit a record high of $1,434.50 an ounce last week on low inventories and rising demand, rose 0.2 percent to $1,348 an ounce. Silver was down 0.1 percent $15.31 an ounce, while platinum gained 0.9 percent to $795.