Gold prices climbed on Tuesday to their highest level in more than a month, supported by a weaker U.S. dollar and lower Treasury yields, as investors looked for progress in trade talks ahead of an August 1 deadline.

Spot gold was little changed at $3,389.98 per ounce, as of 0503 GMT. Earlier in the session, bullion hit its highest level since June 17.

U.S. gold futures held their ground at $3,402.90.

"Gold's move on the upside has been pretty much supported by positive technicals and as well as reinforced by a broad base of dollar weakness," OANDA senior market analyst Kelvin Wong said.

The U.S. dollar index (.DXY), opens new tab was hovering near a more than one-week low against its rivals, making greenback-priced gold less expensive for other currency holders.

Benchmark 10-year U.S. Treasury yields hit a more than one-week low on Monday. USD/US/

The European Union is exploring a broader set of possible countermeasures against the United States as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats.

U.S. President Donald Trump has threatened 30% duties on imports from Europe if no agreement is signed before the August 1 deadline.

"There could be a possibility that U.S. and the respective trading partners may not agree to the terms and condition and that potentially could see a bit of uncertainty and there could be some hedging activities by market participants going forward," Wong said.

Also on radar, the European Central Bank is expected to hold interest rates steady at 2.0% following a string of cuts at the end of its policy meeting on July 24. The U.S. Federal Reserve's monetary policy is scheduled for next week.

Traders are pricing about a 59% chance of a rate cut by the Fed in September, according to the CME FedWatch Tool. Gold tends to perform well in a low-interest-rate environment.

Spot silver fell 0.5% to $38.71 per ounce, platinum added 0.3% to $1,442.55 and palladium fell 1.3% to $1,250.19.

Source: Reuters