Investing.com - Gold prices edged higher on Tuesday, as the metal drew support from a weaker U.S. dollar and growing expectations that the Federal Reserve will need to slow its pace of rate hikes next year.
Comex gold futures were up $2.85, or around 0.2%, at $1,252.25 a troy ounce by 8:40 AM ET (13:40 GMT), not far from a five-month peak of $1,256.60 touched in the last session.
Meanwhile, spot gold was trading at $1,246.95 per ounce, up $2.46, or about 0.2%.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.2% at 97.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
The Federal Reserve is widely expected to announce its fourth rate hike of 2018 next week, but investors are beginning to question how many increases it can implement next year.
While policymakers have pointed to three increases in 2019, the market is starting to bet the U.S. central bank may halt its rate hikes altogether next year.
Lower interest rates can give gold a lift as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
In other metals action, silver futures gained 19.2 cents, or 1.3%, at $14.79 a troy ounce.
Platinum was up 0.8% at $788.65, while palladium climbed 1.9% to $1,180.45.
Elsewhere, March copper rallied 4.8 cents, or 1.8%, to $2.768 a pound, as a fresh whiff of optimism over the U.S.-China trade dispute lifted sentiment.
-- Reuters contributed to this report.