Gold jumped 1% to a one-week high on Tuesday, as a sliding dollar and hopes of more U.S. fiscal stimulus bolstered its appeal among investors seeking an inflation hedge.
Spot gold was up 0.3% to $1,835.24 per ounce, after hitting its highest since Feb. 2 at $1,848.40 earlier in the session. U.S. gold futures settled up 0.2% to $1,837.50.
"The reflation trade is really starting to settle in," and gold is benefiting from the dollar weakening again, and stimulus being the big focus, said Edward Moya, senior market analyst at OANDA.
Gold is "going to attract a significant amount of flows because of just the uncertainty with the global economic recovery and also, the U.S. Federal Reserve is going to be very accommodative for quite some time." U.S. lawmakers were armed with a budget outline to push U.S.
President Joe Biden's $1.9 trillion COVID-19 relief package through Congress without Republican support, with the legislation likely to pass before March 15.
Gold is considered a hedge against inflation and currency debasement likely to result from widespread stimulus measures.
Raising bullion's appeal for holders of other currencies, the dollar slipped to a more than one-week low.
Investors awaited Fed Chairman Jerome Powell's speech before a virtual Economic Club of New York event at 1900 GMT on Wednesday.
Auto-catalyst platinum , meanwhile, rose 2.3% to $1,183.55, after hitting $1,189.90, its highest since August 2016.
"While a fabrication surplus is expected this year, strong investment demand should once again push the platinum market into a deficit," UBS analysts wrote in a note.
"Other supporting drivers include low real U.S. interest rates, a weaker U.S. dollar, and global economic recovery thanks to aggressive monetary and fiscal stimulus measures."
Silver gained 0.4% to $27.36 an ounce, palladium added 0.1% to $2,333.29.