Gold pared early gains as data awaited for clues on the Federal Reserve's monetary policy outlook, while the dollar fell on the nomination of Scott Penn as U.S. Treasury Secretary, while oil hovered near a two-week high.

gold

Gold pared early gains after approaching a three-week high, supported by a weaker dollar and safe-haven demand amid rising geopolitical tensions, while investors awaited more data to clarify the U.S. central bank's monetary policy outlook.

Spot gold fell 1.5% to $2,671.73 an ounce, after rising to $2,721.43 in early trading.

U.S. gold futures rose 0.3 percent to $2,721.10 an ounce in morning trading before retreating to $2,675.20 in the latest trading.

Hezbollah fired a barrage of rockets into Israel yesterday, following Israeli air strikes that killed at least 29 people in Beirut and reported damage near Tel Aviv.

Meanwhile, the governor of Russia's Kursk region, which borders Ukraine, said Russia had destroyed two missiles and 27 drones launched by Ukraine over the region.

Gold typically rises during times of geopolitical tensions, economic risks, and in an economic environment characterized by low interest rates.

Markets currently expect a 51% chance of the Fed cutting rates by 25 basis points in December, according to the CME Group's FedWatch tool.

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Dollar

The dollar gave up some of its recent gains on Tuesday as investors assumed that US President-elect Donald Trump's nomination of Scott Pence as Treasury Secretary would reassure the bond market and lower bond yields.

The yield on the 10-year Treasury note fell to 4.343% from 4.412% last Friday after the bond market cheered Trump's pick of Scott Bessent as Treasury secretary.

The dollar index fell in its latest transactions by 0.61% to 106.90 points after reaching a two-year high of 108.090 on Friday.

The dollar fell 0.25 percent against the yen to 154.35 yen, moving further away from its recent high of 156.76 yen.

The euro rose 0.72% to $1.049, moving away from a two-year high of $1.0332.

Sterling hit a six-week low of $1.2484 on Friday and was up 0.33 percent at $1.2571 in early trade on Monday, but remained just below last week's high of $1.2714.

For cryptocurrencies, Bitcoin rose 0.75% to $98,593 after profit-taking.

Bitcoin has jumped more than 40% since the US election, supported by expectations that Trump will ease regulatory restrictions on cryptocurrencies.

Oil

Oil prices hovered near a two-week high on Monday, following a 6% gain last week, as geopolitical tensions between Western powers and oil producers Russia and Iran escalated, raising the prospect of supply disruptions.

Brent crude futures fell 53 cents, or 0.72%, to $74.63 a barrel, while West Texas Intermediate crude futures rose 61 cents, or 0.84%, to $70.63 a barrel.

Both benchmarks posted their biggest weekly gains since late September and settled at their highest since Nov. 7 after Russia fired a hypersonic missile at Ukraine in a warning to the United States and Britain, following a strike by Kiev on Russia using U.S. and British weapons.

In addition, Iran responded to a draft resolution by the International Atomic Energy Agency on Thursday by ordering measures such as operating new, advanced centrifuges used in uranium enrichment.

Iran's foreign ministry said yesterday it would hold talks on its controversial nuclear programme with the European troika on November 29.