Gold rose on Tuesday, propped up by expectations for an interest rate cut by the US Federal Reserve, but traded within a relatively narrow range as investors awaited further clarity on the central bank's stance on future monetary policy.
Spot gold was trading 0.5% higher at $1,505.07 per ounce at 1:38 p.m. EDT (1738 GMT).
US gold futures settled up 0.1% at $1,513.40 an ounce.
"What you have is traders positioning in gold right now trying to prep themselves for the Fed meeting," said Michael Matousek, head trader at US Global Investors.
The Fed is widely expected to announce a rate cut when it concludes a two-day policy meeting on Wednesday. It would be the central bank's second such cut after lowering rates in July for the first time since the 2008 financial crisis.
"If the Fed underwhelms, or doesn't cut rates, you'd probably see a good drop in gold. If they do come out and surprise everybody by cutting 50 bps (basis points) instead of 25, you might see a good pop in gold," Matousek added.
On Monday, gold rose more than 1% before settling 0.6% up for the day after attacks on oil facilities in Saudi Arabia over the weekend intensified worries about stability in the Middle East, prompting US President Donald Trump to apply more pressure on the Fed to lower rates.
"The US and Saudi Arabia are not likely to just sit on their hands, which will keep anxiety in the world marketplace."
Gold prices have climbed nearly 19%, or more than $200, since touching a 2019 low of $1,265.85 in early May, supported by an increasingly dovish stance from major central banks, escalation in the US-China trade war and Middle East tensions.
Elsewhere, silver rose 1.2% to $18.06 an ounce and platinum was up 0.6% to $942.08.
Palladium remained unchanged at $1,605.10 after touching a record high of $1,626.81 in the previous session.