Gold at 3-week high

SINGAPORE. — Gold jumped to a three-week peak yesterday on the expectation the Federal Reserve will not raise US interest rates soon and as the dollar traded close to its lowest in nearly eight months, although profit-taking chipped away at some recent gains.

The US currency has been on the back foot since Fed chairman Janet Yellen in March doused the expectation for hikes in US interest rates anytime soon, making dollar-priced commodities cheaper.

Lower rates underpin demand for noninterest-yielding bullion, while hurting the dollar.

Spot gold rose to $1 259,66 per ounce early on Tuesday, its highest since March 18. However, it pared gains to trade down 0,3 percent at $1 254 per ounce by 3.06am GMT, on profit-taking following a 1,4 percent overnight gain. US gold futures climbed to a three-week top of $1 261,90.

“While policy uncertainty is supportive of gold, it is the currency markets that we look to, to wield the biggest influence on bullion,” HSBC said.

The dollar remained on the defensive on Tuesday after slumping overnight to its lowest since August against a basket of major currencies and a 17-month low against the Japanese yen. The dollar index has shed nearly 3 percent after recent dovish comments by Ms Yellen.

The scaled-back expectation for further monetary tightening this year helped gold to its best quarter in nearly 30 years in the three months to March, after the US central bank raised rates in December for the first time in nearly a decade. — Reuters.