By Bharat Gautam

(Reuters] – On Tuesday gold rose as the dollar fell, while palladium recovered after worries about lower demand from China’s COVID lockdowns. The previous session saw prices drop to a one-month low.

After hitting its lowest point since March 29, the previous session, it was 0.3% higher at $1,903.97 an ounce as of 0437 GMT. U.S. gained 0.4% to $1,903.70

In the latest session, dollar strength declined from its two-year peak. Greenback-priced Gold was cheaper. [USD/]

However, benchmark edged higher, limiting gains in zero-yield gold. [US/]

Jeffrey Halley from OANDA, a senior analyst at OANDA, stated that some support had appeared in Asia because China reduced foreign currency reserves of local banks. He also suggested that a neutral fix was being made to support the Yuan. However, gold’s stability looked fragile.

Russia warned the world to not underestimate the risks of nuclear war and warned that the West’s conventional weapons could be used in Ukraine.

Bullion can be used as an investment to protect value in times of economic or political crisis.

Spot silver rose 0.8% to $23.79 an ounce. Platinum rose 1.1% at $930.87 and palladium rose 2.8% to 2,203.25.

On Monday, palladium prices dropped nearly 13% to the lowest level since March. This was due to fears that COVID-19 lockdowns in China would further reduce demand for this metal. It is also used to curtail emissions in vehicles.

The recovery of palladium seems fragile, much like gold. Halley stated that an increase in the COVID-19 situation Beijing nearly certainly will see a test for support at $2,025, Halley added.

Nornickel is the largest producer of palladium in the world. It said Monday that its first quarter palladium production was down year-on-year. However, it maintained its prior output forecast for 2022 unaffected by Western sanctions against Moscow.