Gold futures rallied on Tuesday (2 August) with high expectations of a rate cut by the Bank of England and safe-haven trades by investors.
With the Bank of England poised to cut interest rates in the eyes of many, inaction by the US Federal Reserve weakening the dollar and the macroeconomic climate driving investors to seek the safety of the yellow metal, Comex gold futures contract for December delivery rose 0.52% or $7.09 to $1,360.24 an ounce at 12.58pm BST.
Additionally, Comex silver spiked 1.12% or 23 cents to $20.73 an ounce on hedging calls by traders, and spot platinum also rose 1.00% or $11.5 to $1,170.10 an ounce.
FXTM research analyst Lukman Otunuga said: "Gold bulls were on the offence on Tuesday with prices charging towards fresh three-week highs above $1,360, as the potent mixture of dollar vulnerability and growing uncertainty over the Fed's decision to raise US rates provided a foundation for bulls to attack.
"It seems this yellow metal is regaining its safe-haven allure and could be set for further inclines if the persistent concerns over the global economy continue to attract anxious investors to safety. Dollar weakness from the string of soft US data could ensure gold remains buoyed while the lingering post-Brexit uncertainties propel prices higher."
From a technical standpoint, gold remains bullish on the daily timeframe and previous resistance around $1,345 could transform into a dynamic support that encourages a further incline towards $1,370.
Away from precious metals, oil markets breathed a sigh of relief stemming three negative sessions that saw benchmark prices plummet to three-month lows on oversupply concerns and a tussle for market share between Middle Eastern producers Saudi Arabia and Iraq.
At 1.07pm BST, the Brent front month futures contract was up 1.52% or 64 cents to $42.78 per barrel, while the West Texas Intermediate was 0.97% or 39 cents to $42.78 per barrel, as traders indulged in short covering, i.e. buying in futures that have been sold short, to avoid losses when prices move upward.
Overall market sentiment remains bearish with Brent crude averaging $46.50 per barrel in the third quarter, according to Barclays, as the bank's analysts predict it could fall further.
In a note to clients, they wrote: "Demand growth remains lacklustre and has not made significant inroads to clear the inventory overhang for oil.
"With the macroeconomic picture worsening and Saudi Arabia unlikely to exhibit much restraint as Iran seeks incremental market share, refineries are going to find themselves in the line of fire."
Overnight, Saudi Arabia lowered the asking price for its Arab Light crude sold to Asian buyers by $1.10 per barrel below Singapore benchmark prices, while Iraq's officials said oil exports from the country's southern ports rose to 3.2m barrels per day (bpd) on average in July, up from 3.175m bpd in June, as Gulf OPEC members continue to raise the stakes in a bid to hold on to market share.