Gold Near Session Highs as Dollar Struggles To Find Support

Investing.com – Gold prices traded close to session highs supported by ongoing dollar weakness despite the Federal Reserve suggesting that the inflation could be set to move higher this year.

for February delivery on the Comex division of the New York Mercantile Exchange rose by $5.70, or 0.42%, to $1,348.80 a troy ounce.

The Federal Reserve kept interest rates unchanged on Wednesday but stoked expectations for a more aggressive pace on monetary policy tightening after adopting a slightly more hawkish outlook on inflation.

“Inflation on a 12‑month basis is expected to move up this year and to stabilize around the Committee’s 2 percent objective over the medium term.”

RBC said that the shift in the Fed’s language signalled a “clear upgrade” on inflation as the central bank ditched its dovish commentary on inflation.

That said, however, the dollar has struggled to find its footing as traders continue to pile into rival currencies amid expectations that major central banks are poised to remove loose monetary measures which could boost their respective currencies.

Dollar-denominated assets such as gold are sensitive to moves in the dollar – A dip in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.

In other precious metal trade, rose 0.35% to $17.18 a troy ounce, while rose 0.46% to $1,008.90.

rose 0.42% to $3.21; while 5.11% to $2.841 after EIA data showed natural gas storage supplies fell less than expected.

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