Gold rose on Tuesday on uncertainty over how economies would emerge from a deep slowdown, although optimism about a potential vaccine for the novel coronavirus capped bullion's advance.
Spot gold rose 0.6% to $1,741.68 per ounce. U.S. gold futures were up 0.7% to $1,747.
"All the fundamentals for gold have never been better in history. Unless we have more optimism about the vaccine, we will begin to see an upward momentum to a new high," said Jeffrey Sica, founder of Circle Squared Alternative Investments. "There's continued concern about these pockets of outbreak around the world... any news of a setback in re-integration of businesses into the economy will ultimately lead gold higher."
Massive global stimulus measures to limit the economic damage caused by lockdowns and business suspensions to limit the spread of the coronavirus have supported gold, since it's widely viewed as a hedge against inflation and currency debasement.
U.S. Senators are expected to grill Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell about actions still needed to keep the world's largest economy afloat and about missteps in rolling out some $3 trillion in aid so far.
In Europe, France and Germany proposed a 500 billion euro ($543 billion) recovery fund. Driving demand for safe havens, meanwhile, were fears of a further deterioration in China-U.S. relations, with Nasdaq Inc set to unveil restrictions that will make it more difficult for some Chinese companies to list there, sources said.
U.S. stocks edged lower as investors booked profits from Monday after drugmaker Moderna's said its experimental COVID-19 vaccine showed promising results in a preliminary trial. Monday's jump in equities as well as oil markets had caused a retreat in gold from a multi-year peak.
"Right now, the market is focused on the aftermath of the big rally in stock markets yesterday ... but the underlying demand has not gone away," said Saxo Bank analyst Ole Hansen.
"We're looking at a weaker economic outlook, massive central bank measures and tensions on the geopolitical front, which should keep gold prices high."
Elsewhere, palladium gained 0.7% to $2,027.52 an ounce, to hit a near one-month peak of $2,109.20.
Platinum jumped 1.4% to $829.21 and silver rose 0.8% to $17.32.