Gold retraced its gains after hitting a new high of $2,631 as markets continued to capitalize on the Fed's aggressive rate cut.
In addition, growing geopolitical tensions in the Middle East are also attracting investor demand for safe-haven assets such as the precious metal.
At 9.25am, the price of gold was at $2,628.41, barely moving since it opened in early trading on Tuesday.
Interest rate cut sentiment is positive for gold prices as it lowers costs for asset holders and attracts more investors.
In addition, the decision of the People's Bank of China (PBOC) which lowered its rate by 10 basis points to 1.85% on Monday and injected additional liquidity into the financial system continued to push gold further.
Recently, the United Nations (UN) has warned that the Middle East war is on the brink of catastrophe as Israel and Lebanon move closer to an all-out war.
Over the weekend, Israel attacked targets in Lebanon and Hezbollah responded with rocket attacks in northern Israel. It is possible that Israel could launch a ground attack on Lebanon and escalate the war.
Such an event has the potential to raise the price of gold again.
