Gold prices continued to rise on Tuesday, the day after achieving sharp gains due to increasing uncertainty in the market, as a result of the escalation in Gaza, as cautious statements issued by senior US Federal Reserve officials affected the dollar and bond yields.
The conflict threatens more volatility for investors, adding to uncertainty ahead of corporate earnings season and crucial US inflation data this week.
Gold is seen as a safe investment in times of economic uncertainty, but since it does not yield a return, it loses its appeal when interest rates rise.
Benchmark 10-year Treasury yields have fallen sharply from their 2007 highs.
The dollar index fell against the backdrop of an indication yesterday by senior US Central Bank officials that rising long-term bond yields could distract the bank from further increases in the short-term interest rate.
Markets are now looking forward to the minutes of the US central bank's September meeting scheduled for release on Wednesday.
Market movements
By 4:52 GMT, gold remained almost stable in spot transactions at $1,860.68 per ounce, after earlier reaching its highest levels since September 29.
US gold futures rose 0.56 percent to $1,874.60.
Gold rose about 1.6 percent on Monday, the largest daily jump in five months, as military clashes in Gaza boosted demand for safe haven assets and oil.
As for other precious currencies, silver fell in spot transactions 0.2 percent to $21.85 per ounce, platinum rose 0.3 percent to $889.11, and palladium rose 0.5 percent to $1,144.82.
