Gold prices firmed on Tuesday after hitting their highest in nearly four months, helped by a weaker US dollar and as investors used the non-yielding bullion as a hedge against rising inflation.

Spot gold was up 0.2% at $1,868.30 per ounce by 0854 GMT, after hitting its highest since Jan. 29 earlier in the session. US gold futures rose 0.1% to $1,869.60.

"The narrative is clearly shifting towards inflation ... but perhaps more critically, you have got the US dollar weakness, which is probably the key and prime driver," said independent analyst Ross Norman.

Analysts also noted that inflows into gold exchange-traded-funds indicated that investors were buying gold to hedge against inflation worries.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.7% to 1,035.93 tonnes on Monday, their highest since late-March.

In the wake of rising prices in the United States, minutes of the Federal Reserve's last policy meeting due on Wednesday are expected to provide further clarity on the central bank's monetary policy outlook and policymakers' views on inflation.

Dallas Fed Bank President Robert Kaplan reiterated his view that he does not expect interest rates to rise until next year.

"Fed will not be tempted to rock the boat in terms of the recovery which is gathering some momentum. Raising rates or discussion on tapering would probably be counterproductive at this stage," Norman said.

Gold is also getting support from chart-based buyers after the bullion broke above its 200-day moving average, considered to be a bullish signal.

Elsewhere, silver jumped 1.1% to $28.49, after hitting its highest since Feb. 2 in the session.

The gold/silver ratio has dropped to around 65.5, meaning that silver has climbed even more sharply than gold, Commerzbank analysts wrote in a note.

Palladium gained 1.1% to $2,932, while platinum fell 0.6% to $1,232.