Gold futures prices rose to their highest in two weeks on Thursday amid low-volume holiday trading, as the US dollar fell, but gains were limited on expectations of more rate hikes by the US Federal Reserve next year, boosting the appeal of the yellow metal.
Gold for February delivery on the Comex Exchange rose to a session peak of $1,151.30 a troy ounce, a level not seen since Dec 14.
Spot gold was up 0.5 per cent at $1,147.56 an ounce, after reaching its highest since Dec. 14. at $1,149.84 earlier in the session.
It is anticipated to remain thin for the rest of the week where most investors away for the holidays year-end trade.
The USD fell on Thursday, slipping from him at the highest level in 14 years against a basket of currencies as investors locked in profits in the period leading up to the end of the year.
The dollar index which measures dollar’s strength against a trade-weighted basket of six major currencies, was up 0.5% at 102.71 In early Tokyo trade, down from the highest level in 14 years last week’s 103.62.
Federal Reserve raised US interest rates earlier this month in with First time in a year, and indicated three more increases in the next year from the previous forecast of two.
At the same time, European and Asian stock markets fell in the wake of downbeat performance on Wall Street overnight, where shares fell across the board with the S & P 500 largest daily fall posting since October 11.
Both the strong dollar and rising interest rates typically bearish for gold, which is denominated in dollars and struggling to compete with yield-bearing assets when borrowing costs rise.
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