Gold prices on Tuesday held on to last session's more than one-week high on concerns around U.S.-China relations and as rising violent protests in the United States stoked fears of a resurgence in virus cases, while optimism on reopening of economies checked their rise.
Spot gold was flat at $1,739.48 per ounce, as of 0344 GMT. U.S. gold futures rose 0.1% to $1,752.10.
"It appears that there are factors both supporting, and limiting appreciation in the gold price," said National Australia Bank economist John Sharma.
The U.S. is likely to revoke Hong Kong's special status, and China would retaliate by limiting purchase of U.S. products- putting the Sino-U.S. trade deal in doubt, and providing support to gold; while the easing of lockdowns is limiting gains, Sharma added.
In a sign that the worst of the economic downturn from the coronavirus pandemic might be over, U.S. manufacturing activity crawled up slightly from an 11-year low, and China's factory activity unexpectedly returned to growth- in May.
Despite some optimism about economies gradually reopening, gold prices have gained in the previous three sessions, and hit their highest on Monday since May 21.
Bullion was supported by fears that the demonstrations over the death of an African American in police custody could worsen the spread of the coronavirus, and hamper the world's biggest economy's recovery.
U.S. President Donald Trump stated he would deploy the military, if required.
Reflecting investor sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.5% to 1,128.40 tonnes on Monday, the highest in seven years.
The dollar hovered near more than a two-month low hit on Friday, making gold less expensive for holders of other currencies.
Palladium rose 0.1% to $1,962.61 per ounce, while platinum was down 0.5% at $843.70, and silver fell 0.6% to $18.17.
(Reportng by Harshith Aranya and Brijesh Patel in Bengaluru; Editing by Vinay Dwivedi)