Gold rose on Tuesday after hitting a six-week low in the previous session as bargain hunting set in and the dollar fell before speeches by U.S. Federal Reserve officials.
Fed officials have signaled that they plan to continue on their current trajectory of interest rate hikes despite a slow down in inflation. However, investors are skeptical and market pricing shows only a 40 percent chance of a rise in December.
A huge sell order totaling 1.85 million ounces pushed gold to a six-week low on Monday, although the precious metal ultimately failed to break below the 200-day moving average.
"If yesterday gold wasn't able to push below the 200-day moving average that's a positive sign," said ABN Amro analyst Georgette Boele. "The market is skeptical about Fed rate rises this year and next. Overall we're optimistic about the outlook for gold, we (see) a weaker dollar later in the year," she added.