Gold breaks above $1,800 as dollar weakens after US Fed commentary

A softening in the greenback helped gold cross the psychologically important $1,800-per-ounce range, just above the metal’s average price last year.

On Monday, Fed officials, including Esther George of Kansas City and Mary Daly of San Francisco, stressed they wanted to avoid unnecessary disruptions to the US economy as they prepare to start raising interest rates. This suggests less appetite for an aggressive 50 basis-point move in March, likely keeping gold under pressure last week.

READ: Hikes loom as Fed officials insist on not jamming the brakes on the economy

“Gold is being supported by a weak US dollar,” said Daniel Breesemann, an analyst at Commerzbank AG. Exchange-traded fund flows are also providing support, Breesemann said. Those tracked by Bloomberg added more than 5 tonnes of bullion on Monday, expanding this year’s profit to 42 tonnes.

Investors will be watching the January US jobs report on Friday for more clues on the trajectory of inflation.

Spot gold rose 0.6% to $1,806.92 an ounce as of 11:24 am in New York. The Bloomberg dollar spot index fell for a second day, although the currency showed some losses after data from the Domestic Manufacturing Survey for January showed cost pressures were not easing. Silver, platinum and palladium all gained. Markets in China and some other Asian countries will be closed for most of the week for the Lunar New Year holidays.

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