Gold added to overnight gains on Wednesday on a softer dollar and heightened tensions after Turkey shot down a Russian warplane, but the rally was capped on expectations of a US rate hike next month. Turkey shot down the Russian jet near the Syrian border on Tuesday, saying the plane had violated its air space, in one of the most serious publicly acknowledged clashes between a Nato member country and Russia for half a century.
Spot gold edged up 0.3 percent to $1,078.61 an ounce by 0645 GMT, following a 0.6 percent gain on Tuesday. US gold rose 0.5 percent, after a near 1 percent gain in the previous session.
"Gold rose on flight-to-quality as investors sought protection from volatile financial markets in the wake of global stresses," said HSBC analyst James Steel.
"While we think gold may be supported, we are not anticipating a robust rally, and look for only moderate gains, with a lot of upside resistance," he said.
Despite the gains, gold wasn't too far from a near-six-year low of $1,064.95 hit last week on increasing views that the Federal Reserve will hike US rates next month for the first time in nearly a decade.
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