Spot gold rose 0.6% at $1,906.83 per ounce by 11:49 a.m. EDT (1649 GMT). U.S. gold futures gained 0.8% to $1,907.50.
"The sole driver behind gold prices is the high likelihood that there is going to be chaos surrounding the U.S. elections, from the predictions of not having a president by tonight," said Jeffrey Sica, founder of Circle Squared Alternative Investments.
Despite Democrat Joe Biden's consistent lead in national polls, the contest is close in swing states, and it may be days before the result is known due to delays in ballot counting.
"We're going to break above $2,000 an ounce levels with a potential of an all-time high by the (presidential) inauguration (on Jan. 20)," Sica said, adding that gold is going to have significant momentum until the next president is decided and then it will depend on further stimulus.
Bullion also received support from a falling dollar, as investors bet on victory by Biden, who could potentially inject a larger stimulus into the virus-hit economy.
The pandemic continued to rage with several European countries under fresh lockdowns.
"The election result, when we get it, is likely to be gold-friendly with a likely weakening dollar, fresh stimulus, rates in negative territory and a likelihood that the Fed will start buying longer term assets," StoneX analyst Rhona O'Connell said in a note.
The Federal Open Market Committee will begin its two-day meeting on Wednesday.
Meanwhile, gold prices had climbed to an all-time high of $2,072.50 an ounce in August, but since then have come down on reduced holdings by gold Exchange Traded Funds (ETF).
Silver rose 0.7% to $24.21 per ounce on Tuesday. Platinum rose 1.8% to $873.83 and palladium gained 3.2% to $2,282.76.
(Reporting by Sumita Layek in Bengaluru; additional reporting by Peter Hobson; Editing by Mark Heinrich)
By Sumita Layek
