Gold closed above $1,285 an ounce on Tuesday after an earlier pause in the dollar rally prompted a break above $1,280 an ounce that triggered chart-based buying, but gains were expected to be limited as optimism grows on the pace of the U.S. economic recovery.
Spot gold hit a session high at $1,290.80 an ounce in early trade as stop orders were triggered on a break of the 200-day moving average just above $1,280. Buy stop orders are automatic orders placed by traders at pre-set levels.
Prices have been rebounding from a two-month low of $1,273.06 which was hit on Aug. 21 on speculation of an eventual increase in U.S. interest rates. They were last trading up 0.6 percent at $1,284, while U.S. gold futures closed $6.30 higher at $1,285.20 an ounce.
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