Gold soared on Monday on retreat in the U.S. dollar ahead of the awaited Federal Reserve meeting that may provide clues about the interest path this year.
The precious metal climbed to a high of $1105.39 an ounce, while currently trading around 1103.33, compared to the session’s opening at $1097.52.
The dollar retreated against a basket of major currencies to hover around 99.43, after setting a high of 99.67 the previous session, according to the dollar index.
The drop in the dollar encouraged some demand on bullion as an alternative investment.
Eyes will focus on the Federal Reserve’s two-day meeting starting on Tuesday, noting that estimates of rate increase resulted in a 10 percent drop in the value of gold in 2015.
The Fed raised its interest rate in December, where analysts predict four rate increases this year but probably the first one would be in March.
The volatile start of the year that shaved $15 trillion off global stock markets may prompt the Fed to be cautious regarding raising rates.
In the coming weeks, physical demand from China may increase as the Lunar New Year, which starts early February, approaches.
Gold rose despite that Asian shares resumed rise from multi-year lows on Monday.
Brent crude futures of April delivery dropped after hitting a high of $33.48 a barrel to trade around $31.98.
