Spot gold was at $472.40/473.20 by 1455 GMT, up from $465.00/465.70 in the US market late on Monday. It is more than 10 percent higher from a year ago but below the recent 17-3/4-year high of $480.25.
"Now the market is set to push higher again and potentially to head towards $475, maybe even towards the $480 level," said James Moore of TheBulliondesk.com.
"We have seen a period of consolidation within the market. Fund players were comfortable to maintain their long positions in gold and keen to push the market higher again."
The dollar fell on Tuesday after stronger than expected German business sentiment data fanned talk of interest rate rises in Europe sooner than forecast.
The currency was further hit by an October reading of US consumer confidence that came in weaker than expected. The euro at around $1.2096 was much higher than Tuesday New York levels.
Crude oil rose towards $61 a barrel as investors sought new proof of slower fuel use in the United States after Hurricane Wilma bypassed oil and gas fields in the Gulf of Mexico.
People invest in safe-haven gold in difficult times. The metal generally rises with a weakness in the US currency as dollar-priced gold becomes cheaper for those holding other currencies.
"Gold had three big spikes up in the last month and a half. It has taken a breather and it could be ready for the next one up," said Paul Merrick, vice-president of commodities at RBC Capital Markets.
"Gold is just moving up with the currencies."
Analysts in Europe said physical demand had been supporting the metal, but traders in India, the world's largest gold consumer, said festival season buying was dull because of volatile and high prices.
Gold imports into the country had fallen during the season, which peaks in early November with Diwali, the Hindu festival of lights. India imports about two-thirds of its annual gold demand of more than 800 tonnes.
Technical analysts said the metal could target $500 in the coming months and even $550 in the long term as worries about inflation and the US economy and geo-political concerns persisted.
In other precious metals, palladium surged to $214 an ounce to match the level attained about 11 months ago. It was quoted at $213/216, versus $207/211 in New York late on Monday.
Silver fetched $7.80/7.83, up from $7.64/7.67 last quoted in New York. It is not far from $7.88 hit on October 11, the highest in about 10 months.
Dealers said the industrial metal could remain volatile, with direction coming from gold, copper and oil markets. London Metal Exchange three-month copper futures surged to a record high of $4,018 per tonne last week.
Spot platinum rose to $939 an ounce, off a 25-1/2 year high of $943 nearly two weeks ago. It was quoted at $937/942 versus $926/929.