"It's clear that the main focus is on the US-China developments. Reports from China on the trade front indicate we are nowhere near any change in the current standoff on trade," Saxo Bank commodity strategist Ole Hansen said. "And with the growth numbers in Germany pointing to a recession, there's not much of an excuse to sell gold if you are holding any, keeping the market more or less unchanged even though we had a toning down of the confrontational tone on trade," Hansen said.
US President Donald Trump on Monday had predicted a trade deal was coming with China, but Beijing did not confirm reports of a phone call between the two sides. "Overall, if trade tensions remain elevated, gold can count on this issue as being flat out supportive," Stephen Innes, managing partner, VM Markets, said in a note. Helping gold's case, the dollar eased 0.2% on Tuesday, making the metal cheaper for investors holding other currencies, Markets have priced in a quarter-point cut in interest rates by the US Federal Reserve next month, and over 100 basis points of easing by the end of next year.