Mubasher: Gold prices rose on Tuesday, driven by hopes that the US Federal Reserve would halt its rate hike cycle sooner than expected, as the dollar weakened after rallying in the prior session.

By 8:14 am GMT, spot gold rose 0.28% to $1,247.95 per ounce, while gold futures went up 0.25% to $1,252.50 per ounce.

With a “weakening US dollar outlook and very dovish pivots from the Fed, a lot of uncertainty boxed around equity markets [...] it can still turn quite negative, so this is why gold remains a good hedge against a lot of market risks,” Singapore-based OANDA Asia-Pacific trading head Stephen Innes told Thomson Reuters, saying that he is “very bullish on gold in this setup into 2019.”

The US dollar index, a tracker of the greenback against a basket of major peers, dipped 0.13% to 97.0900, after strengthening in the previous session as a vote on Brexit deal was delayed.

Investors are looking to the Fed meeting for hints on future interest rate hikes.

Doubts mounted in Wall Street on Monday over the Fed’s plans to resume interest rate hikes in the next year, with futures traders wagering on a halt.

“Markets still see an increase in December but even one further hike in 2019 is now being questioned whereas two of them were fully priced in just a month ago,” DailyFX currency strategist Ilya Spivak told Reuters.

Lower interest rates lower the opportunity cost of holding non-yielding bullion and drag the green back down.