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Gold prices climbed for a second straight session to hit a one-week peak on Tuesday as the U.S. dollar pulled back from recent highs, while investors awaited comments from Federal Reserve officials for clarity on interest rate cut policy.
Spot gold rose 0.9% to $2,634.78 per ounce by 1111 GMT, the highest since Nov. 11. Prices gained 2% on Monday, recovering from a two-month low hit on Thursday. U.S. gold futures added 0.9% to $2,638.70.
"The selling has run out of steam and that's attracting those potential buyers sitting on the fence waiting for the market to stabilize to get back in," said Ole Hansen, head of commodity strategy at Saxo Bank.
"The dollar has stopped rising and that probably was the necessary trigger."
The U.S. dollar experienced a pullback as investors engaged in profit-taking following last week's stellar rally that saw it scale a one-year high. The decline in the dollar's value makes gold less expensive for buyers holding other currencies.
Multiple Fed officials are scheduled to speak this week, which could offer further insights into the rate cut paths.
Traders currently see a 61% chance of a 25-basis-point cut in December.
Also boosting gold was an escalation of attacks in the Russia-Ukraine war. Russia launched its largest air strike on Ukraine in nearly three months on Sunday.
Gold, which doesn't pay any interest, performs well in times of geopolitical uncertainty and low-interest rate environments.
Among other metals, spot silver added 0.8% to $31.4, hitting a one-week high earlier in the session. Platinum ticked 0.2% lower to $965.41.
Palladium was steady at $1,003.43 after rising more than 5% on Monday.
"The long-term outlook for palladium remains negative, in our view, as the metal is projected to be over-supplied due to declining demand from the autocatalyst sector," UBS analysts said in a note.
(Reporting by Rahul Paswan in Bengaluru; Editing by Ros Russell, Alexandra Hudson)