Spot gold was up 0.2 per cent at $ 1,297.64 per ounce by 0106 GMT.
US gold futures for August delivery were steady at $ 1,301.80 per ounce.
The dollar index , which measures the greenback against a basket of six major currencies, was down 0.1 per cent at 93.829.
US Treasury yields fell on Tuesday as traders piled back into lower-risk government debt after Italy’s new prime minister vowed to enact economic policies that could balloon the nation’s already-heavy debt load.
Italy’s new prime minister promised on Tuesday to bring radical change to the country, including more generous welfare and a crackdown on immigration, as the two party bosses who hold the keys to his anti-establishment government nodded their approval.
US President Donald Trump is considering a shift in the effort to revamp the North American Free Trade Agreement to separate talks with Canada and Mexico, White House economic adviser Larry Kudlow said on Tuesday.
Mexico put tariffs on American products ranging from steel to pork and bourbon on Tuesday, retaliating against import duties on metals imposed by President Donald Trump and taking aim at Republican strongholds ahead of US congressional elections in November.
The European Union does not expect any breakthrough on steel and aluminium tariffs imposed by the United States on the EU and Canada at talks of G7 leaders in Canada later this week, a senior EU official said on Tuesday.
US services sector activity accelerated in May, pointing to robust economic growth in the second quarter, but trade tariffs and a shortage of workers posed a threat to the outlook.
The Federal Reserve’s next interest rate increase will mark a key milestone as the era of cheap dollars draws to a close, further unsettling a US bond market already rattled by rising inflation and government debt supply.
Holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, fell 0.03 per cent to 836.13 tonnes on Tuesday from 836.42 tonnes on Monday.
Gold jewellery sales in number one market China are finally picking up after years of decline, but consumers are still shying away from platinum.