By Katherine Dunn
LONDON—Gold traded at a three-week high in London Tuesday, buoyed by a weaker dollar and uncertain timing for a rate increase by the U.S. Federal Reserve.
Spot gold traded up 0.40% at $1,358.78 per troy ounce in midmorning European trade, its highest point since July 11.
The WSJ Dollar Index, which measures the dollar against a basket of other currencies, was trading down 0.33% on Tuesday. A weaker greenback makes dollar-denominated commodities, including gold, more affordable for investors who hold other currencies.
Gold has risen in recent days, supported by weaker-than-expected 1.2% growth in U.S. gross domestic product in the second quarter.
Weaker growth in the U.S. is typically bullish for gold, as it raises the likelihood that the U.S. Federal Reserve won't raise interest rates in the near future.
However, the timing of such an increase remains uncertain, said David Govett, head of precious metals at brokerage Marex Spectron in London.
“The Fed seemingly is in hold mode, which is positive for gold, but every once in a while they let slip that September is still a possibility for a rate rise,” said Mr. Govett.