- Spot gold rose 0.5% to $1,852.03 per ounce by 2:03 p.m. ET, after hitting its highest since Nov. 19 at $1,852.65. U.S. gold futures settled up 0.6% at $1,852.50.
Gold hit a more than two-month high on Tuesday as geopolitical concerns over Ukraine pushed investors toward safe havens including bullion, ahead of the U.S. Federal Reserve's meet that could offer cues on its monetary policy tightening plan.
Russia said it was watching with great concern after the United States put 8,500 troops on alert to be ready to deploy in case of an escalation, while Britain urged its European allies to have sanctions ready to go if Russia invades Ukraine.
Gold is acting like a "flight to safety trade" in a wait-and-watch scenario until after the Fed announcement tomorrow, said Bob Haberkorn, senior market strategist at RJO Futures.
Investors await cues on how aggressive the Fed would be for the rest of the year and if it would signal more hikes to tackle inflation, Haberkorn added.
The Fed is expected to indicate it plans to raise rates in March and offer insights into how hawkish it intends to be.
Although gold is considered a hedge against inflation and geopolitical risks, interest rate hikes would raise the opportunity cost of holding non-yielding bullion.
Gold also seemed to shake off pressure from inflows into rival safe-haven dollar which had touched a two-week peak.
"Despite the Fed likely set to announce the start of a U.S. rate hike cycle this week, gold keeps holding up well. Support for the yellow metal comes from high inflation and elevated market volatility," UBS analyst Giovanni Staunovo said.
"Unless the Fed surprises with an even more hawkish statement, gold (could) stay supported," said Staunovo, adding that historically, gold outperforms equities when market volatility increases.
Spot silver fell 0.1% to $23.92 an ounce, platinum was up 0.1% at $1,028.00 while palladium rose 2.3% to $2,198.37.