Gold for August delivery at the COMEX division of the New York Mercantile Exchange was adding $6.30 to $1,328.30 an ounce. The gold price traded as high as $1,334.90 and as low as $1,324 an ounce, while the spot price was inching higher by 60 cents, or 0.05%.
Chinese manufacturing PMI released overnight for June hit 51, which was less than the 51.1 reading economists expected. Any reading above 50 represents expansion in the sector.
Investors often purchase gold as a hedge against slowing economic activity.
Tuesday marked the second consecutive trading session that gold prices were gaining amid a shortened week.
"We've had too many bears in the woods and funds were underinvested in the first half because of the big stock market gains," George Gero, precious metals strategist at RBC Capital Markets, said in a phone interview from New York. "You don't want to be caught short in a short week and you never sell a dull market."
Gold jumped 9.8% through the first half of 2014, which follows the worst percentage drop -- 30% -- for the yellow metal in three decades.
Despite many analysts this week and last week predicting a top in price, gold on Tuesday continued to post gains as it touched its highest price since March 21, when it hit $1,343.30 intraday.
While futures show firm gains, physical buying dropped last month to its lowest level since 2010. BullionVault, an online retailer for buying and selling of previous metal, said Tuesday its gold investor index dipped to 51.2, down from the prior month's reading of 52.4. It was the lowest monthly report since February 2010. Any reading under 50 represents there are more sellers than buyers.
-- Written by Joe Deaux in New York.
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