Gold rises on dollar pullback, lower Treasury yields

Spot gold rose 0.9% at $1,750.59 per ounce and U.S. gold futures rose 0.9% to $1,764.20

Gold rose on Tuesday, snapping six straight sessions of losses, helped by a pullback in the dollar and lower Treasury yields following weak U.S. business activity data.

Spot gold rose 0.9% at $1,750.59 per ounce by 1433 GMT. Prices slipped in the last six sessions and hit $1,727.01 on Monday, the lowest since July 27.

U.S. gold futures rose 0.9% to $1,764.20.

Dollar and yields have dipped after the weak flash PMI data, helping gold, said Edward Moya, senior analyst with OANDA.

Also, the data indicates a major contraction, showing the economy has weakened quickly, opening the door to the idea that the Fed might not be that aggressive, further helping gold, he said.

U.S. private-sector business activity contracted for a second straight month in August to its weakest in 18 months.

The dollar index slipped 0.6%, making gold cheaper for overseas buyers. U.S. Treasury yields also declined.

Focus was now on Fed Chair Jerome Powell's speech at an annual global central banking conference in Jackson Hole, Wyoming, on Friday.

Bullion tends to suffer in a high rate environment as it yields no interest.

If (gold) prices are able to breach $1,724, a selloff towards $1,700 is on the cards. Alternatively, a move back above $1,752 may open a path towards $1,770 and $, 1800, respectively, FXTM analyst Lukman Otunuga said.

Meanwhile, business activity across the euro zone contracted for a second straight month in August as the cost of living crisis forced consumers to curtail spending while supply constraints continued to hurt manufacturers, a survey showed.

Europe is going into a recession, China is seeing a slowdown. Gold is eventually going to see some safe-haven trade again, Moya added.