Gold prices edged higher on Wednesday after the previous session's sharp fall, but rising U.S. interest rates and lingering Sino-U.S. trade tensions continued to weigh on the market with investors selling the metal at small rallies.
Spot gold was up 0.3 percent at $1,204.64 an ounce at 0329 GMT. Prices hit their highest since Aug. 10 at $1,214.28 on Tuesday, but closed 0.8 percent lower as U.S. Treasuries rose after the United States and Mexico struck a trade deal.
"The selling (on Tuesday) shows nobody wants to chase the metal above $1,210 ... There is going to be interest rate hikes in September and December, and that is acting as a burden for gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Gold has lost its appeal as a safe-haven asset, having fallen 7.5 percent this year, amid international trade disputes and the Turkish currency crisis, with investors increasingly turning to the dollar instead.
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