Gold prices rose more than 2% on Tuesday to breach the key $1,700 per ounce level, following a fall in the dollar and bond yields as well as some technical buying, while market focus remained on U.S. inflation data later this week.
Spot gold rose 2.3% to $1,713.45 per ounce by 1:23 p.m. ET (1823 GMT). U.S. gold futures rose 2.3% to $1,719.7.
Gold earlier in the day hit $1,716.82, highest since Oct. 6, and has already gained over $100 an ounce since a more than two-month low of $1,615.59 last week.
"It looks like fresh buying in gold and silver. I think the dollar is backing down with the Fed looking to slow to 50 bps in December," said Tai Wong, a senior trader at Heraeus Precious Metals in New York.
The dollar index fell 0.6% to a near two-week low against its rivals, making bullion more appealing for other currency holders. U.S. Treasury yields also crept lower.
"Gold has also broken through $1,680 and then $1,700 and the break of those technical levels could be providing an additional boost," OANDA analyst Craig Erlam said.
Data on the U.S. consumer price index is due on Thursday, with economists forecasting a decline in both the monthly and yearly core numbers to 0.5% and 6.5%, respectively.
"If we do see inflation has continued to slowly tick down, that will bode well for markets in general with the expectations of less Fed rate hikes moving forward," said David Meger, director of metals trading at High Ridge Futures.
Although gold is seen as an inflation hedge, higher interest rates raise the opportunity cost of holding bullion.
Market participants are also focused on Tuesday's U.S. midterm elections.
Other metals latched on to gold's run, with silver rising 3.1% to $21.41 per ounce, its highest since late June.
Platinum rose 2% to $998.86 while palladium gained 1.6% to $1,927.38.
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