Gold recovered on Tuesday on bargain hunting after prices fell to a more than one-week low in the previous session as a temporary truce between the US and China in tit-for-tat tariffs boosted risk appetite and dented bullion's safe-haven appeal.

Spot gold rose 0.5% to $3,250.50 an ounce, as of 0458 GMT. Bullion fell 2.7% in the previous session.

US gold futures rose 0.9% to $3,255.30.

After two days of negotiations in Geneva, the US and China announced tariff cuts for the next three months, with US tariffs on Chinese imports dropping to 30% from 145% and Chinese duties on US imports dropping to 10% from 125%, sending global stocks surging. The US and China imposed tariffs on each other last month, sparking a trade war.

"There is some value buying taking place in gold at current levels that is helping to support prices, despite the generally better global growth outlook with the U.S. and China in better shape," said Tim Waterer, chief market analyst at KCM Trade.

"The consolidation move in the dollar has allowed gold prices to rise a bit."

Federal Reserve Chair Adriana Kugler said the pause in import levies reduces the likelihood that the U.S. central bank will need to cut interest rates in response to the economic slowdown.

Traders are looking to the U.S. Consumer Price Index report, due later in the day, for fresh signals on the Fed's monetary policy trajectory.

Markets are expecting a 55 basis point rate cut this year by the Fed, starting in September.

"If the inflation data comes out on top, it could reduce the momentum in the USD, which could lead to gold making a move higher going forward," Waterer said.

Gold, traditionally considered a safe haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment.

Meanwhile, Citi projects continued near-term consolidation in the $3,000 to $3,300 range and lowered its 0-3-month price target to $3,150.

Spot silver rose 1.3% to $33.02 an ounce, platinum rose 1.1% to $985.31, and palladium rose 0.2% to $947.51. (Newsmaker23)

Source: Reuters