Tuesday saw gold prices reach their highest level in more than a week, following a day of significant increases due to increasing market anxiety brought on by the Middle East war, as dovish comments from senior Fed officials pressured the currency and bond yields.

Spot gold advanced to $1,865.19 per ounce while gold futures ticked up by 0.5% to $1,874.10 per ounce.

As a result of military battles between Israel and the Palestinian Islamist party Hamas, which increased demand for safe-haven assets like oil, gold increased by around 1.6% on Monday, its largest one-day gain in five months.

Investors are seeing increased volatility as a result of the confrontation, which also heightens concern ahead of this week's important U.S. inflation data and the start of the corporate earnings season.

Investing in gold is regarded as a safe haven during uncertain economic times, but because it pays no interest, its appeal tends to diminish as interest rates rise.