Gold prices stabilized after hitting a six-week high on Monday, amid a "risk-off" sentiment (a state of investors reducing risk appetite, shifting money from risky assets to safe-haven assets) dominating the market and investors focusing on the possibility of the US Federal Reserve (Fed) cutting interest rates this month, while silver prices increased to record levels.
Spot gold prices rose 0.1% to $4,235.59/ounce at 06:45 GMT, after hitting their highest level since October 21. The December US gold futures increased by 0.3% to $4,269.40.
Silver prices rose 1.1% to $26.99 an ounce after hitting a previous record high of $27.86.
The US dollar fell to a two-week low, making gold - priced in greenback - cheaper for holders of other currencies.
Todays trading session was a risk-off as S&P futures fell 0.8%, in line with a sell-off on major digital currencies. That also created a positive feedback loop for gold as a safe haven asset, especially in a less liquid trading session, said Kelvin Wong, senior market analyst at OANDA.
US stock futures fell in the Asia trading session, while in the cryptocurrency market, Bitcoin fell 3.6% to $87,881.82 and Pether fell 5% to $2,871.59.
Recent puppet statements from Fed Governor Christopher Waller and New York Fed Chairman John Williams, along with weaker US economic data, continue to reinforce expectations that the central bank will ease policy in December.
According to CME's FedWatch tool, futures show an 87% chance of a rate cut.
White House economic adviser Kevin Hassett, who is seen as a leading candidate for the Fed president, said on Sunday he would be ready to take the job if appointed by President Donald Trump. Similar to Trump, Hassett believes interest rates should be lower.
The market is now waiting for the US core PCE inflation data to be released on Friday for more signals on the Fed's policy path.
Lower interest rates often support non-yielding precious metals like gold.
Wong added that silver prices increased mainly due to thin liquidity after last week's CME disruption, rather than due to fundamental factors.
In other precious metals, platinum rose 1.3% to $1,694.18, while palladium rose 1.4% to $1,471.94.
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