Gold rose as the dollar gave up short-lived gains from a court ruling that struck down President Donald Trump's global tariff agenda.

Bullion rose as much as 1.3%, erasing losses suffered during a brief rally in the U.S. currency as a weaker dollar made the precious metal more attractive to buyers in other countries. The dollar gauge fell 0.4%.

The dollar initially gained after the U.S. Court of International Trade ruled that many of Trump's tariffs were illegal. But strategists warn that there are many alternative routes the president can take to ensure his signature economic policies are not derailed.

The dollar has weakened this year as a widening trade war fueled by the White House has prompted investors to reconsider their allocation to U.S. assets, in the so-called "Sell America" trade. The uncertainty has also boosted demand for safe-haven assets such as gold. "I don't see anything other than, over the course of the year, further dollar weakness, because the dollar is overvalued," Jim O'Neill, former chairman of Goldman Sachs Asset Management, said in an interview on Bloomberg TV.

The U.S. trade court ruling is just the latest twist in the chaos sparked by Trump's aggressive trade policies. While gold is currently about $180 below its all-time high set last month, the safe-haven metal is still up more than a quarter this year. Trend-following commodity trading advisors will buy gold in the coming weeks regardless of how the tariff situation plays out, according to Daniel Ghali, senior commodity strategist at TD Securities.

While gold exchange-traded funds have suffered five straight weekly declines, "signs of selling exhaustion from China and Western ETFs suggest that the window has opened for gold to strengthen as a function of positioning," Ghali added. Spot gold rose 1.2% to $3,327.44 an ounce as of 12:21 p.m. in New York. Silver, palladium and platinum also rose. (alg)

Source: Bloomberg