Gold rose to a two-week high on Wednesday, gaining for the third straight session and breaching the 200-day moving average amid uncertainty over the timing of a US interest rate increase and ahead of the final US presidential debate. Spot gold was up 0.5 percent at $1,268.44 an ounce by 2:27 pm EDT (1827 GMT), after touching its highest since October 5 at $1,273.34. US gold futures settled up 0.6 percent at $1,269.90.
Spot prices had fallen about 7 percent over the past three weeks, as markets re-priced the likelihood of a Federal Reserve rate increase in December. "Technically, gold is well supported above $1,250 an ounce ... today's push in the $1,270 area is a positive signal ahead of the US elections and the possible Fed rate hike in December," ActivTrades chief analyst Carlo Alberto De Casa said.
The metal is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets. "Since (Fed Chair) Janet Yellen's speech last Friday, there is the growing view, which I think is the right view, that the Fed is going to move very slowly. The market has discounted a December rate hike," said Bill O'Neill, co-founder of LOGIC Advisors. Spot silver was up 0.2 percent at $17.63 an ounce. Platinum rose 0.2 percent to $943 and palladium fell 0.3 percent to $636.50.
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