Gold prices eased on Tuesday on the back of a firmer dollar, but fears of a global economic slowdown fuelled by an intensifying US-China trade war kept prices near multi-year highs.

Spot gold was down 0.2 per cent at $1,528.00 per ounce at 0718 GMT, but still not far off last week's $1,554.56, its highest level since April 2013. US gold futures were up 0.4 per cent at $1,535.9 an ounce.

The stronger dollar is weighing on gold prices, Phillip Futures analyst Benjamin Lu said, adding that investors are waiting on the US manufacturing survey by the Institute for Supply Management (ISM) for some forward guidance on US economic conditions.

“Better than expected ISM result can give some weakness to gold prices on an intraday basis,” Lu said.

The dollar index, which measures the greenback against a basket of six major currencies, was up 0.4 per cent, having climbed to a more than two-year high. A firmer dollar makes bullion costlier for investors holding other currencies.

Meanwhile, Asian stocks on Tuesday were dented by US-China trade frictions. Overall risk sentiment was poor and the trade war was likely to create more volatility, benefiting gold, Lu said.

China has lodged a complaint against the US at the World Trade Organisation over US import duties, trashing the latest tariff actions as violating the consensus reached by leaders of both countries at a meeting in Osaka.

A new round of tit-for-tat tariffs came into effect on Sunday and although US President Donald Trump has said both sides would still meet for talks later this month, tensions have shown little sign of abating.

Also keeping investors on the edge were uncertainties over Brexit. Lawmakers will decide on Tuesday whether to shunt Britain towards a snap election when they vote on the first stage of their plan to block Prime Minister Boris Johnson from pursuing a no-deal Brexit.

“I think markets are still structurally bullish, with consistent bearish headlines fuelling gold's climb,” said Howie Lee, economist at OCBC Bank. “I won't be surprised if gold breaks above $1,600/oz before this year ends.”

Gold rose more than $100 in August due to the trade war, fears of a global economic downturn, negative debt yields around the globe and hopes for interest rate cuts by central banks.

Federal fund futures implied traders saw a 93 per cent chance of a 25 basis point rate cut by the US Federal Reserve this month.

Elsewhere, silver rose 0.1 per cent to $18.47 per ounce. Platinum was steady at $929.48 per ounce, while palladium was up 0.4 per cent at $1,536.94.

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