Gold prices rose to their highest level in a week on Tuesday, supported by a weaker U.S. dollar, as the market awaits comments from Federal Reserve officials for guidance on the interest rate outlook Americans.
Spot gold rose 0.4% to $2,623.54 an ounce at 0246 GMT, the highest since November 12. Prices rose 2% on Monday.
U.S. gold futures gained 0.5% to $2,627.60.
The US dollar retreated as profit-taking began following last week's rally. A weaker dollar makes bullion cheaper for buyers holding other currencies.
“Recent market movements are largely technical, influenced by an overbought U.S. dollar,” said Kyle Rodda, financial markets analyst at Capital.com.
Recent strong economic data has raised concerns about whether the Fed will continue to cut rates after 75 basis points of reductions since September. Several Fed officials are scheduled to speak this week.
The gold price movement will reflect any change in expectations for the December meeting, Rodda said, adding that any data or comments from officials on the matter will be relevant.
Traders currently see a 58.8% chance that the Fed will cut rates by 25 basis points in December, compared to a 41.2% chance that it will keep them on hold.
Geopolitically, Russia launched its largest air attack on Ukraine in nearly three months on Sunday, severely damaging the country's power grid.
Non-yielding assets like bullion thrive in a low interest rate environment and geopolitical uncertainties.
According to economists at the San Francisco Fed, the tightness of the American labor market continues to fuel inflationary pressures, but to a lesser extent than in 2022 and 2023.
Among other metals, spot silver rose 0.5% to a one-week high of $31.32 an ounce. Platinum rose 0.3% to $969.80.
Palladium was steady at 1,005.20 after rising more than 5% on Monday.
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