By K. Sathya Narayanan
Meanwhile, palladium soared to a record, putting it about $12 short of parity with gold.
Spot gold
U.S. gold futures
"Mainly it's the weakness in the dollar today ... Dollar was down with respect to most of the currencies as a result of the outcome, at least what we call it as a positive outcome, from the G20 meeting between U.S. and China," said Jeff Klearman, portfolio manager at GraniteShares.
"It wasn't the most positive outcome that could have occurred but it was positive ... (it) has helped to weaken the dollar and support the metal."
U.S. President Donald Trump and Chinese President Xi Jingping agreed to hold off on new tariffs during a Group of 20 summit in Argentina over the weekend after months of escalating tensions on trade and other issues.
The truce encouraged investors to sell the dollar <.DXY>, making gold cheaper for holders of other currencies. [USD/]
"The U.S.-China trade ceasefire gave traders and investors a double-barrelled shot of upbeat news, following last week's surprisingly dovish comments coming from U.S. Federal Reserve Chairman Jay Powell," Kitco Metals senior analyst Jim Wyckoff said in a note.
The U.S. dollar index is weaker as secondary world currencies were boosted, including the Chinese yuan, by the truce, resulting in "a bullish outside market force for the metals markets," Wyckoff said.
The U.S. currency had been the preferred safe haven this year as the U.S.-China trade conflict unfolded against a backdrop of higher U.S. interest rates, denting gold's appeal.
"Bullion is likely to get a further boost if prices manage to stand firmly above $1,230 and particularly if they surpass $1,235," ActivTrades chief analyst Carlo Alberto De Casa wrote in a note.
"A climb would become more likely if the Fed reduces the number of rate hikes in 2019/20."
Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar.
Meanwhile, Palladium
The metal, mainly used in emissions-reducing auto catalysts for vehicles, has risen about 15 percent so far this year.
"It looks like there will be a breakthrough with China and the tariffs, which could translate into more demand moving forward, especially in cars," said Bob Haberkorn, senior market strategist at RJO Futures.
Trump said Monday that China agreed to cut import tariffs on American-made cars.
Spot silver
(Reporting by K. Sathya Narayanan, Nallur Sethuraman and Swati Verma in Bengaluru; Editing by Jonathan Oatis and Jeffrey Benkoe)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)