Gold prices climbed to their highest level in more than a week on Tuesday as the dollar retreated, while the spotlight shifted to the release of the U.S. Federal Reserve's latest monetary policy meeting minutes for cues on further interest rate cuts.
Spot gold was up 0.5% at $2,027.19 per ounce. U.S. gold futures settled 0.8% higher at $2,039.8.
The dollar index was down 0.2%, making greenback-priced bullion less expensive for overseas buyers.
The minutes from the U.S. central bank's January policy meeting are due on Wednesday.
"We continue to see the likelihood that the Fed will lower rates by mid 2024," which is going to be an underlying supportive factor for the gold market," said David Meger, director of metals trading at High Ridge Futures.
But, the Fed minutes will reiterate that rate cuts are going to be pushed back until May or June, which is certainly not going to help the gold market, Meger said, adding there is fundamental support below the $2,000 level.
Lower interest rates boost the appeal of non-yielding gold.
Hotter-than-expected U.S. consumer prices and producer prices data last week reduced hopes for a rate cut in March. Markets are currently pricing a 78% chance of a cut in June, according to the CME Fed Watch Tool.
"Strong physical market buying activity has kept (gold) prices from weakening," analysts at TD Securities wrote in a note.
"At a certain price, silver will always make its way to market, but the outlook for physical demand suggests that higher prices will be necessary to satisfy the ongoing period of structural deficits."
Spot silver was up 0.2% at $23.06 per ounce.
Spot platinum gained 0.6% to $904.15 per ounce and palladium rose 2.8% to $980.14.