Gold soared to a three-week high on Monday on softer dollar, which remained under pressure due to the Federal Reserve’s cautious interest rate hikes outlook.
The precious metal hit a high of $1254.17 an ounce on Thursday, while currently trading around $1247.67 from the opening at $1239.80.
Gold pared some of its gains as most Asian shares pared their earlier losses after Chinese inflation raised expectation’s China would continue to stimulate the economy.
Last week, gold locked its second straight weekly advance and the best weekly gain since the week ended March 4.
The yellow metal resumed its advance on Monday as the dollar continued to trade near its lowest level in five years and 17-month low versus the yen.
The dollar index, which tracks the green currency’s movements, hit a low of 94.01, while currently trading around 94.23. Against the yen, the dollar inched up to 108.09 after hitting a 17-month low of 107.61.
“Several expressed the view that a cautious approach to raising rates would be prudent or noted their concern that raising the target range as soon as April would signal a sense of urgency they did not think appropriate,” the minutes of March’s policy meeting said.
New York Fed President William Dudley said on Friday the Fed must approach further rate hikes cautiously and gradually due to the external risks threatening the world’s biggest economy.
However, Fed Chairwoman Janet Yellen said last week the U.S. economy is on a solid course and still on track to warrant further borrowing cost increases.
Later in the week, eyes will focus on comments from Federal Reserve officials to get clues about the Fed’s future monetary stance.
