Spot gold was up 0.3 percent at $1,287.01 per ounce by 0340 GMT, after gaining nearly 1 percent the previous day.
U.S. gold futures for December delivery rose 0.8 percent to $1,292.80 per ounce.
• "It's a dollar story and a concern that the market's been having with regards to geopolitical events," said Dominic Schnider at UBS Wealth Management in Hong Kong.
"The market believes at the moment that there's not much inflation and the Fed need not do much," Schnider said.
"We disagree, and believe the Fed will in September come with a balance sheet reduction and hike rates in December."
• "In the shorter term, and in the absence of any geopolitical headlines, traders should watch the performance of the dollar against its G-10 peers for clues to gold's short term direction," said Jeffrey Halley, a senior market analyst at OANDA.
• Meanwhile, palladium was up 0.9 percent at $922 after earlier marking it highest since Feb. 2001 at $926.
• "Palladium took some inspiration from the more industrially oriented metals," UBS's Schnider said, pointing to a broad based rally that has pushed the prices of aluminium, copper and zinc to multi-year peaks.
The auto industry is by far the largest consumer of the palladium
• Among other precious metals, silver was up 0.2 percent at $17.11 per ounce, while platinum eased 0.3 percent to $974 an ounce.
• Spot gold may test a resistance at $1,294 per ounce, a break above which could lead to a gain to the next resistance at $1,304, Reuters technical analyst Wang Tao said.
Reference: Reuters
Thai
Eng