Gold futures prices gained to the highest level in 3-weeks on Tuesday as US dollar remained weaker on expectations the Fed will not raise U.S. interest rates soon and as the dollar traded close to its lowest in nearly eight months.
U.S. gold futures June delivery touched highs of $1,264.6 the most since March 22.
Spot gold rose to $1,259.66 an ounce, its highest since March 18. However, it pared gains to trade down 0.2 percent at $1,254.70 an ounce.
The US dollar index, which measures the greenback force against a weighted basket of six major currencies, fell to 93.95, not far from the valley Monday 93.74, the lowest level since October.
The dollar has weakened through the board after the latest moderated comments by Federal Reserve Chairman Janet Yellen led investors for rolling back the expectations on the timing of the next rate hike.
The dollar showed low response to comments by the president of the Dallas Fed, Robert Kaplan, who said Monday he is “wide open” to decide whether to raise rates in June meeting of the bank, but ruled out a rate hike from April.
The economic data and uncertainty over US monetary policy has helped risk aversion, increasing investor appetite for bullion and other assets perceived as safer stores valuables in- cluding the Japanese yen.
At the Multi Commodity Exchange gold for delivery in far-month August declined by Rs 32 or 0.11% to Rs 29,490 per 10 grams at prevailing levels amid a weak trend overseas.
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