Gold hovered near the highest level in three months on Thursday, as the sharp drop in the U.S. dollar boosted demand on the metal as an alternative investment.
The precious metal climbed to a high of $1141.72 an ounce, while currently trading around $1141.90 from the session’s opening at $1141.47.
The yellow metal recorded its best daily gain in two weeks as the slipped 1.65 percent versus a basket of major currencies.
The dollar index fell to 97.26, while hit a bottom of 96.88 on Wednesday, after comments from president of the Federal Reserve Bank of New York William Dudley.
Financial conditions have tightened significantly and the weakening global view could have “significant consequences” to the U.S. economy, Dudley said on Wednesday.
Investors ignored the upbeat ADP employment data and focused on the services sector, which showed a narrowing expansion in January.
The slowdown in the services sector raised concerns about growth in the first quarter since the manufacturing sector remained in contraction for a fourth straight month.
The U.S. will release its jobs report that provides a clearer picture about the labor market.
Brent crude inched down to $35.02 a barrel from the opening at $35.30, after rising sharply the previous session.
It seems that the yellow metal is getting some support from physical demand despite that the Lunar New Year in China will start on February 7.
