Gold continued to extend its gains since Monday trading as the US dollar posted losses due to uncertainty over US trade policy and fiscal health after Moody's downgrade of US debt last weekend.
At 9.20 am, the price of gold was at $3,293.41, up 0.12% since it opened early Wednesday in Asian trading.
Gold demand also found support when the US stock market turned 'red' following Moody's latest report on US government debt from AAA to AA1, reinforcing the negative stance, affecting investors and further leading to gold's rise.
In addition, the tone of Fed officials remained cautious ahead of the upcoming FOMC meeting and none of them opened up suggestions to ease their policies amid the ongoing economic slowdown in the United States.
On Monday, Atlanta Fed President Raphael Bostic said he was more inclined to see them make just one cut in 2025.
In addition, geopolitics are also playing a role in driving gold's safe-haven price higher as the failure to reach a ceasefire between Russia-Ukraine and rising tensions in the Middle East could see investors gravitate towards the yellow metal.
This week, traders will be looking at the Fed's speech, Flash PMI, housing data and Initial Jobless Claims.
