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Gold hits highest level since October 4th, as Fed holds rates steady

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Gold prices briefly hit highest level at $1309.10 an ounce for the first time since October 4th, after the Federal Reserve announced it left interest rates unchanged on Wednesday.

Following their two-day November meeting, the Fed's decision to keep interest rates unchanged was widely expected. In September, the Fed hinted at an increase in December.

Spot gold was up 0.7 percent at $1,297.41 an ounce at 3:30 pm EDT.

U.S. gold futures December delivery settled up 1.6 percent at $1,308.20 per ounce.

Investor anxiety over the election after the renewal of an FBI probe into Democratic candidate Hillary Clinton's emails knocked European stocks to near four-month lows and sent the dollar to its lowest since early October.

That helped push gold back above the $1,305 an ounce mark.

"The election polls are the main driver for this increase in the gold price. If there is a President Donald Trump, there could be a change in policy," LBBW analyst Thorsten Proettel said. "That would increase uncertainty among market participants."

Traders were starting to reconsider long-held bets of a victory for Democratic candidate Hillary Clinton amid signs Republican Donald Trump could be closing the gap after the FBI's announcement of the new email probe on Friday.

A Reuters/Ipsos opinion poll on Monday showed Clinton held a five percentage point lead over Trump, but other polls showed her lead slipping more sharply. Real Clear Politics, which averages the results of most major polls, shows it had dropped from 4.6 points on Friday to 2.5 points on Monday.

Markets were also awaiting direction on the timing of a U.S. interest rate hike from a two-day Federal Reserve policy meeting, which is due to conclude later in the day.

"The chance of rates being hiked today are slim to none," Marex Spectron said in a note. "What will be closely looked at is the wording of the accompanying announcement, as to whether December is on the cards."

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, and also boost the dollar, making the metal more expensive for those holding other currencies.

The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares, reported its first inflow in just over a week on Tuesday, of 2.7 tonnes. Last month the fund reported a net outflow of just over 5 tonnes.

Gold Miners was up over 2 percent, on pace for their fourth straight day of gains for the first time since July.

Among other precious metals, silver was up 1 percent to $18.51 per ounce. Earlier in the session, the metal hit a high of $18.55, its highest since Oct. 4.

Platinum was down 0.3 percent to $987.96 per ounce. Palladium was down 0.1 percent to $631.

- CNBC's Gina Francolla contributed to this report.