Gold prices on Tuesday hit their highest in nearly three weeks, as a pullback in the dollar made bullion less expensive for holders of other currencies, while investors awaited minutes from the US Federal Reserve for clarity on monetary policy.

Share Market Live

NSE

Spot gold was up 0.4 percent at USD 1,798.46 per ounce, as of 03:15 GMT, its highest since June 17.

US gold futures rose 0.8 percent to USD 1,798.10 per ounce.

"It's mainly a weakening US dollar that is boosting gold prices. Gold was sold down heavily after the June FOMC meeting and now that expectations have been priced in, buyers are back to the market," said Margaret Yang, a strategist at DailyFX.

"However, gold's upside potential might be limited against the backdrop of global hawkish turn in monetary policies. Don't think prices will recover back to the early June levels anytime soon."

The dollar weakened 0.1 percent, moving further away from a three-month high hit last week.

Focus this week is on minutes from the Fed's latest meeting due on Wednesday after a hawkish tilt from the US central bank last month in which policymakers' projected a start to rate hikes in 2023, sending gold prices below USD 1,800 level.

Higher interest rates translate into an increase in the opportunity cost of holding bullion, which pays no interest.

"Gold prices may be able to hold onto recent gains but staying above USD 1,800 resistance may not be in the traders' radar until the latest minutes of the Fed's meeting is released," Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.

Asian share markets opened a fraction higher ahead of a key decision by Australia's central bank on its quantitative easing programme.

Elsewhere, silver rose 0.5 percent to USD 26.58 per ounce, palladium gained 0.3 percent to USD 2,821.85, and platinum climbed 1 percent to USD 1,108.52.