Gold prices extended gains for the second consecutive session on Tuesday, approaching the US$3,400 level as investors sought safety amid a weakening United States dollar and rising geopolitical tensions.
By 3:45 pm AEST (5:45 am GMT), spot gold prices lifted $21.08 or 0.6% to US$3,355.25 per ounce.
Market sentiment remained cautious, however, as U.S. President Donald Trump’s unpredictable trade agenda continued to stir uncertainty.
Trump said late Monday (Tuesday AEST) that he would announce pharmaceutical tariffs in the next two weeks after signing an executive order to incentivise drug manufacturing in the U.S.
The U.S. dollar faced renewed pressure after the Taiwan dollar surged 8% against it on Monday. The Hong Kong Monetary Authority also intervened to prevent excessive strengthening of the local currency, compounding the dollar's decline and further supporting gold prices.
Meanwhile, heightened geopolitical risks added to the metal’s appeal. Tensions escalated in the Middle East as hostilities intensified between Israel and Houthi rebels.
In Europe, Russia accused Ukraine of launching consecutive drone attacks on Moscow, prompting the temporary closure of the city's three major airports.
Additionally, Ukrainian forces were reported to be advancing in Russia’s western Kursk region.
These developments kept gold in a constructive position ahead of the U.S. Federal Reserve's two-day policy meeting beginning later on Tuesday.
Markets expect the Fed to leave interest rates unchanged, but investors remain alert to any signals regarding future monetary policy moves.
