Gold hits 2-week high

BENGALURU. — Gold prices hit a two-week high yesterday as the dollar held near five-week lows reached in the previous session, finding support from the US Federal Reserve’s conservative guidance on the path of rate increases in 2017.

Spot gold rose 0,4 percent to $1 233,60 per ounce by 3.10am GMT, after earlier touching $1 234,60 per ounce, its highest since March 6. US gold futures gained 0,3 percent to $1 233,90.

The dollar index, which measures the greenback against a basket of currencies, was down 0,1 percent at 100.160, holding near Friday’s lows.

“The dollar is weaker across the board in Asia and also against the euro. It’s pushing gold higher . . . a pure technical buying,” a Hong Kong-based precious metals trader said.

“The market was geared for a hawkish FOMC ( Federal open market committee) and the Fed was really dovish. There was a lot of short-covering. People are now putting gold back on the plate and are more comfortable.”

Spot gold was expected to test a resistance at $1 237 per ounce, a break above which could lead to a gain to $1 243, said Reuters technical analyst Wang Tao.

Markets are also bracing for a packed week of Fed messaging with no less than nine different policy makers set to speak, including chair Janet Yellen on Thursday. Yellen’s cautious guidance last week has investors pricing in almost no chance of another rate rise at the next policy meeting in May, rising to around 50-50 for June.

Since the policy decision to boost rates on Wednesday, gold prices have rebounded more than $ 35 as the dollar plumbed five-week lows after Yellen’s signal of a slower pace of rate increases this year disappointed dollar bulls. — Reuters.