Gold prices rose in Asian trade on Tuesday, coming within sight of new highs amid increased bets that the Federal Reserve will begin cutting rates from September. 

But gains in gold were limited by some resilience in the dollar, as increased speculation that Donald Trump will win a second term as president boosted the greenback.

Spot gold rose 0.2% to $2,427.77 an ounce, while gold futures expiring in August rose 0.1% to $2,432.30 an ounce by 00:46 ET (04:46 GMT). 

Gold close to record high as rate cut bets grow 

Spot prices were now less than $30 away from a record high of about $2,450 hit in late-May. 

The yellow metal’s recent advance was fueled chiefly by increased bets that the Fed will begin cutting rates by September, following soft inflation readings and somewhat dovish signals from the central bank.

Fed Chair Jerome Powell on Monday said the bank had gained increased confidence that inflation was coming down. While he did not directly telegraph a rate cut, markets took his comments to mean that a cut was close.

Traders were seen entirely pricing out expectations that the Fed will keep rates steady in September, and were now pricing in a nearly 90% chance for a 25 basis point cut, according to CME Fedwatch. 

Other precious metals advanced on this notion, but were a mixed bag on Tuesday. Platinum futures fell 0.3%, while silver futures rose 0.2%. 

Dollar resilience limits gold gains, Trump in focus 

But a recovery in the dollar stalled gold’s advance, especially as the greenback rebounded from an over one-month low this week. 

The dollar was supported chiefly by increased speculation that Trump will secure a second term. This came as a failed assassination attempt on the former president appeared to have greatly boosted his popularity, putting him ahead of Joe Biden in the presidential race. 

Trump is expected to enact more protectionist trade policies, which could potentially increase inflation and support the dollar.