Gold rose on Tuesday as US bond yields declined and limited the USD's gains.
US economic data such as the New York Empire State manufacturing index and the New York Fed consumer sentiment survey have been the focus of recent markets.
At 9.40am, gold was at $2,664.45, up 0.7% since it opened in early Asian trade on Wednesday.
The New York Fed released an Empire State manufacturing index for September that printed dismal numbers and the New York Fed's consumer expectations survey showed inflation was revised down in September.
The price of the yellow metal extended its gains from a daily low of $2,638 even as the US dollar was virtually unchanged at 103.25 points.
Additionally, San Francisco Fed official Mary Daly said labor and inflation risks are increasingly balanced. He is optimistic about the economic outlook and predicts a rate cut or two if forecasts hit the target.
XAU/USD tends to run well amid times of geopolitical risk.
Israel revealed that it will target military targets in retaliation against Iran and Hezbollah following the October 1 missile raid.
For now, market attention will turn to US retail sales, industrial production data and initial jobless claims later this week.
