London: Gold rose to a one-month high on Tuesday as the dollar retreated ahead of a Federal Reserve meeting this week, and as concerns over the outcome of the upcoming U.S. elections underpinned prices after last month`s fall.
The announcement of an FBI investigation into Hillary Clinton`s use of a private email server during her time as Secretary of State has pressured stocks this week, lifting gold. The metal often acts as a haven from risk in other markets.
Spot gold hit its highest since early October at $1,284.93 an ounce and was up 0.5 percent at $1,284.10 an ounce at 1043 GMT. U.S. gold futures for December delivery were up $12.10 an ounce at $1,285.20.
Spot prices closed October nearly 3 percent lower.
Worries over the U.S. election saw the so-called "fear index" of market volatility hit its highest in a month. Opinion polls now show Democrat Clinton`s lead over Republican Donald Trump has narrowed slightly since early last week.
"We`ve seen that Clinton has lost some of the headstart she had on Trump," Capital Economics analyst Simona Gambarini said. "A very small possibility of Trump winning the election is priced into gold, so if he actually won, we could see quite a big jump."
"Then we still have to see what will happen with the Fed. It`s unlikely that much will happen this week -- it`s reasonable to expect that it will wait until December to hike rates."
The two-day Federal Open Market Committee meeting starting later on Tuesday will be closely monitored for clues on the timing of a possible interest rate hike.
Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Markets were pricing in around a 78 percent chance the Fed will raise rates in December, but just a 6 percent chance of a hike this week, according to the CME Group`s FedWatch Tool.
Holdings of gold-backed exchange-traded funds edged higher on Thursday, data from the funds showed.
"Gold ETFs have recorded inflows in the past three days of trading, though this has not been sufficient to change the overall weak picture for the month of October," Commerzbank said in a note. "In total, inflows last month amounted to only just shy of 9 tons. This makes it the second-lowest monthly figure this year after April."
Among other precious metals, silver was up 1.3 percent at $18.09 an ounce, while platinum was 0.5 percent at $980.86 an ounce and palladium was up 1.3 percent at $626.68.