Gold prices drifted higher on Wednesday driven by safe-haven demand and rising bets that the US Federal Reserve might reduce interest rates as early as September.
Spot gold rose 0.6% to $2,402.43 per ounce, as of 1242 GMT, having settled lower in the previous four sessions. US gold futures gained 0.5% to $2,442.70.
Gold is seeing some "stabilization as some interest develops in the physical gold markets in the far East; geopolitical tensions are still supportive," said StoneX analyst Rhona O'Connell, Reuters reported.
"It's possible that some distressed sellers from the weekend/Monday will be looking to re-establish their positions as gold has done its usual job by providing liquidity ahead of potential margin calls."
Prices fell as much as 3% on Monday, caught in a global sell-off driven by fears of a US recession.
Bullion is considered a hedge against geopolitical and economic uncertainties and tends to thrive in a low-interest-rate environment.
Traders have altered their rate cut expectations following the soft jobs report last week, with nearly 105 basis points of cuts anticipated by year-end and a 100% chance of a rate cut in September, according to the CME FedWatch Tool.
The outlook for looser monetary policy provides a supportive element for gold as a non-yield-bearing asset, and this factor has combined with strong central bank buying to deliver a positive performance for the yellow metal in 2024 so far, Kinesis Money said in a note.
Meanwhile, China's central bank held back on buying gold for its reserves for a third straight month in July, official data showed.
Spot silver edged 0.1% lower to $27.02 per ounce.
The expected economic slowdown will dent industrial demand and that is likely to cap the upside for silver, said Ricardo Evangelista, senior analyst at ActivTrades.
Platinum rose 1.8% to $928.25 and palladium was up 2.5% to $896.65.
