Multi Commodity Exchange (MCX) gold futures - due for an October 5 settlement - rose by Rs 495 - or 0.96 per cent - to quote at Rs 52,182 at the strongest level recorded during the session. In the previous session, gold futures had jumped 0.75% per 10 gram while silver had rallied 1.6% or about ₹1,100 per kg.
The uncertainty over BREXIT withdrawal, US-China tensions and rising coronavirus cases has kept risk premium high for the gold prices. Spot gold was flat at $1,956.17 per ounce by 0024 GMT after gaining 1% on Monday.
Jeffrey Halley, a senior market analyst at OANDA, stated, "Gold has well-denoted support between $1,900 and $1,920 an ounce, with trend line resistance at $1,970".
Gold prices rose on Tuesday as the US dollar remained subdued, with investors turning their focus to a US Federal Reserve (Fed) monetary policy meeting, seeking details of its plans on inflation targeting. "We may see directionless trade continuing unless either side of $1900-2000/oz range is broken", Kotak Securities said in a note.
Traders now await the U.S. Fed's two-day policy event which ends on Wednesday, its first such meeting since Chairman Jerome Powell unveiled a policy shift towards greater tolerance of inflation, effectively pledging to keep interest rates low for longer.
The dollar index was little changed after posting its worst day in more than two weeks in the last session.
Silver gained 0.7 per cent to US$27.35 and palladium was up 0.3 per cent at US$2,318.80.
Gold has been one of the most consistent gainers through the six months of coronavirus pandemic-led turmoil in financial markets.
"Gold may remain choppy amid lack of clear cues, however general bias may be on the upside owing to increasing challenges to global economy and hopes of dovish stance of major central banks", he added.