Investing.com - Gold prices rose to a six-week high on Tuesday, as the U.S. dollar weakened amid uncertainty surrounding the Federal Reserve’s pace of interest-rate hikes.
Gold for February delivery on the Comex division of the New York Mercantile Exchange touched a session peak of $1,187.65 a troy ounce, a level not seen since November 30.
It was last at $1,184.25 by 3:10AM ET (08:10GMT), down less than $1.00, after gaining $11.50, or around 1%, on Monday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.2% at 101.72 in early trade. The index fell to as low as 101.48, pulling further away from last week's 14-year high of 103.82.
Gold has been well-supported in recent sessions after minutes from the Fed’s December meeting unsettled investors’ expectations about the pace of future interest rate hikes.
A delay in raising interest rates would be seen as positive for gold, a non-interest-bearing asset, and negative for the dollar.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
The U.S. central bank had indicated in December that at least three rate increases were in the offing for 2017, according to a forecast of interest rates from members of the central bank, known as the dot-plot.
However, traders remained unconvinced. Instead, markets are pricing in just two rate hikes during the course of this year, according to Investing.com’s Fed Rate Monitor Tool.
Global financial markets will continue to focus on key U.S. reports in the week ahead, with Friday’s retail sales data in the spotlight.
In addition, there are a handful of Fed speakers on tap, including Chair Janet Yellen on Thursday, as traders look for more clues on the likelihood of higher interest rates later this year.
Meanwhile, U.S. President-elect Donald Trump is to hold a press conference on Wednesday, which investors will be watching for any hints about the possible direction of economic policy.
Also on the Comex, silver futures for March delivery shed 0.2 cents, or less than 0.1%, to $16.66 a troy ounce during morning hours in London.
Meanwhile, platinum dipped 0.5% to $977.65, while palladium advanced 0.55% to $761.33 an ounce.
Elsewhere in metals trading, copper futures rallied 3.1 cents, or 1.24%, to $2.570 a pound.