The demand for gold has increased due to the soft dollar and the Middle East turmoil.
On Monday, gold prices reached a nearly one-week high due to a slight decline in the U.S. dollar and increasing tensions in the Middle East, which boosted the demand for safe-haven assets.
As of 0530 GMT, gold was up 0.3% to $2,019.99 per ounce, reaching its highest price since Feb. 13.
rose 0.4% to $2,031.50 per ounce.
IG market strategist Yeap Jun Rong stated that the yellow metal is experiencing renewed demand as safe-haven flows due to recent geopolitical tensions that are expected to persist.
On Sunday, a UK-registered cargo ship was attacked in the Bab al-Mandab Strait off Yemen, and the UK Maritime Trade Operations agency reported that the crew had abandoned a ship off Yemen after an explosion.
Overseas buyers found greenback-priced bullion more affordable due to its 0.1% decrease in value.
According to Reuters technical analyst Wang Tao, gold may rise into a range of $2,027 to $2,031 per ounce as it has climbed above a falling channel.
The market sentiment improved after China, a major consumer, resumed trade following the week-long Lunar New Year holidays.
Jun Rong stated that the FOMC minutes will be closely monitored for indications of the Fed's policy outlook, and any hawkish comments from policymakers may cause concern about rates remaining high for an extended period, which could negatively impact gold prices.
The U.S. Fed's January policy meeting, scheduled for Wednesday, will provide more information on when it may start reducing interest rates.
Raphael Bostic, President of Fed Bank of Atlanta, stated that although he requires additional information to confirm the decline of inflation pressures, he is willing to consider reducing rates in the near future.
The CME Fed Watch Tool indicates that markets are currently assigning a 77% probability of a June interest rate cut. As interest rates decline, the opportunity cost of holding bullion decreases.
While the price of gold dipped 0.3% to $903.04, it rose 0.7% to $956.66, and the price of silver fell 1.2% to $23.12 per ounce.
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