Gold reached its highest level in a week on Tuesday. Spot gold climbed 1.5 percent to $1,213.02 an ounce while futures gained 1.6 percent to $1,215.10. Investors bought bullion after the dollar was hit by U.S. President Donald Trump's comments on currency devaluation by other countries.
”Clearly Trump remains the main driver for gold. He has really turned from being a bit of a foe of gold to a friend with the uncertainty of his policies,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. A weaker dollar supported bullion, though traders were also eyeing a two-day Federal Reserve meeting starting later in the day, hoping for clues on the outlook for U.S. interest rates. Higher rates could strengthen the U.S. currency, making dollar-denominated gold more expensive for holders of other currencies, potentially dampening demand.
According to theCommerzbank, gold was also finding support from expectations of higher euro zone inflation.
Spot silver rose 2.47 percent to $17.53 an ounce after hitting the highest since Nov. 11 at $17.61. Silver has outperformed gold this month, mainly helped by gains in base metals, which have prompted funds to take long positions since silver also has industrial properties, Saxo Bank's Hansen said.