Investing.com - Gold powered up to three-week highs overnight in Asia before flattening out during morning trade.
The catalyst for the spike was a unanimous decision by the European Central Bank not to change their guidance on monetary policy or discuss changes to an ongoing stimulus program for the time being. The dovish stance was not out of tune with the tone taken by the US federal Reserve.
The Gold futures for August delivery dropped very slightly by 0.07% to $1,244.57 on the Comex division of the New York Mercantile Exchange by mid-morning in Asia but were still up more around $7 from a day earlier. At one point, gold rose as high as $1,247.48, the highest point in three weeks.
West Texas Intermediate crude for September delivery was virtually flat, giving up 0.06% to $46.89. Brent oil futures for September delivery gave up 0.06% to $49.27 by mid-morning.
US Dollar Index futures, which track the greenback against a basket of six currencies, were up 0.05% to $94.61, with the dollar struggling to gain traction but halting a plunge that has taken it to 10-month lows.
The plunge in the greenback was slowed down by expectations, fuelled last week by the testimoney of US Federal Reserve Chair Janet Yellen, that any monetary tightenting in the US would happen slowly and reports from China that suggested growth there is slightly ahead of target for the year.
Earlier this week, China released second quarter GDP growth with a gain of 1.7% that matched expectations and a year-on-year increase of 6.9% that came in slighltly higher than the expected 6.8%. At the same time, China reported industrial production gained 7.6% from a year earlier in June and retail sales rose 11% in June.
Last week, gold prices rose to two-week highs as political uncertainty in the U.S., which has extended to this week, made it more attractive as a safe haven against the falling dollar.