Prices of gold rose back to the highest level in over a year with the support of a weaker dollar and lower European shares after the Chinese trade data fueled concerns about the state of global demand, and supported on hopes that the Federal Reserve will not raise interest rates as quickly as policy meeting next week.
Gold for April delivery on the Comex Exchange rallied $9.40, or 0.74%, to trade at $1,273.40 a troy ounce.
Spot gold rose 0.5 per cent to $1,274.10 an ounce, within reach of Friday’s peak of $1,279.60, its highest since February 3 last year.
Fed Gov Lael Brainard dampened expectations for a short term rate hike on Monday, saying that while global financial markets have steadied in recent weeks, slowing growth in China and weak global demand still pose risks to the economy.
U.S. interest rate futures are pricing in only one rate hike by the end of year, with virtually no chance seen of a rate move in March.
China’s exports fell 25.4 percent in February from a year earlier, while imports fell 13.8 percent.
The dollar remained unchanged against a basket of major currencies, having earlier hit a minimum of one week versus the Japanese yen, while the pan-European FTSEurofirst 300 index fell 1 percent.
The primary market focus is next revised policy on Thursday by the European Central Bank, followed by policy meeting of the Federal Reserve on March 15-16.
At Multi Commodity Exchange, gold for delivery in April was trading Rs 279 or 0.94% higher at Rs 29,871 per 10 gram as speculators widened their bets taking positive cues from the global market.
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