Spot gold rose 0.05% to $1,913.76 per ounce by 9:57 a.m. EDT (1357 GMT), having hit its highest in almost two weeks on Monday at $1,918.36. U.S. gold futures fell 0.06% to $1,919.
"The main pillar of support for this (gold) market continues to be the optimism in regards to the additional coronavirus stimulus package," said David Meger, director of metals trading at High Ridge Futures.
"This theme of ongoing stimulus-erosion of the money supply by injecting additional fiscal and monetary measures into the market" weakens the dollar and supports gold, Meger added.
Gold tends to benefit from widespread stimulus measures from central banks as it is widely viewed as a hedge against inflation and currency debasement.
However, improved appetite for riskier assets, which, apart from the stimulus hopes, was also bolstered by U.S. President Donald Trump's return to the White House from hospital, stymying bullion's gains.
Meanwhile, Chicago Federal Reserve Bank President Charles Evans on Monday said he expects U.S. inflation to reach 2% by 2023 and wants to push it to 2.5% to offset years of below-target price rises.
"If inflation rises ... and the Fed does not raise rates, which it has basically said it will not, then real rates will become more negative. This is good for gold," HSBC chief commodities analyst James Steel said in a note.
The rapid rise in equities may also see increased hedging-related buying in bullion, Steel added.
Elsewhere, silver shed 1.19% to $24.06 per ounce, platinum fell 2.15%, to $877.67, while palladium rose 0.1% to $2,364.49.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Steve Orlofsky)
By Arundhati Sarkar
