Gold hits 2-week high as Fed rate outlook weighs on dollar
MUMBAI: Gold prices hit a two-week high on Monday as the dollar slumped to near 6-week lows after the US Federal Reserve’s dovish outlook on the pace of rate increases this year continued to disappoint dollar bulls.
Spot gold rose 0.5 per cent to $1,234.60 per ounce by 07:35 GMT, after earlier touching $1,235.50 an ounce, its highest since March 6.
US gold futures gained 0.3 per cent to $1,234.10. The dollar index, which measures the greenback against a basket of currencies, was down 0.3 per cent at 100.040, after hitting a low of 100.020, its worst since February 7.
Gold prices have rebounded more than $35 from its low hit before the policy decision to boost rates last Wednesday, while the dollar has fallen 1.7 per cent from its high of 101.71 hit the same day.
Spot gold is expected to test a resistance at $1,237 per ounce, a break above which could lead to a gain to $1,243, Reuters technical analyst Wang Tao said. Holdings of SPDR Gold, the world’s largest gold-backed exchange-traded fund, fell 0.35 per cent to 834.10 tonnes on Friday. — Reuters