Gold rose for a third straight session on Wednesday, hitting a one-month peakon a softer dollar and lower oil prices, while investors awaited U.S. jobs data for clues on the interest-rate outlook.
Spot gold climbed 2.4% to $4,175.53 per ounce by 0640 GMT, its highest since July 7. U.S. gold futures rose 2% to $4,235.30.
The U.S. dollar traded subdued, making greenback-priced metals more attractive to holders of other currencies.
Crude oil extended declines after steep falls in the previous two trading sessions. Lower oil prices can ease inflation concerns that shape expectations of higher interest rates.
Qatar said mediators were making progress in efforts to end the U.S.-Iran war, although Tehran has denied U.S. President Donald Trump's assertion that talks are already underway.
"Gold's relation with oil is still intact as oil prices have a tremendous impact on the global economy in terms of inflationary pressure. If we get a very clear roadmap to further de-escalation in tensions, gold prices could move higher," said Kelvin Wong, a senior market analyst at OANDA.
Gold tends to lose its appeal in a high interest-rate environment despite its status as an inflation hedge, as it yields no interest.
Traders are now pricing in a 59% probability of a Federal Reserve interest rate hike at the central bank's September 15-16 meeting, down from 67% a day earlier.
Federal Reserve Bank of Philadelphia President Anna Paulson said she was keeping an "open mind" about what lies ahead for monetary policy in an outlook that could call for higher rates.
Traders were looking ahead to the ADP employment report due later in the day and the July payrolls report scheduled for Friday.
Analysts at TD Securities said in a note that they expect gold to remain range-bound near current levels.
Spot silver gained 3.8% to $61.76 per ounce and platinum was up 2.6% to $1,779.25, after hitting its highest level since mid-June earlier. Palladium rose 2.6% to $1,389.15, after scaling a two-month peak. - Reuters
