Investing.com - Gold futures climbed back above the key $1,300-level in European trade on Tuesday, as the U.S. dollar crashed to 15-month lows against a basket of other major currencies.
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.
Gold for June delivery on the Comex division of the New York Mercantile Exchange rose to an intraday peak of $1,303.85 a troy ounce before falling back to $1,302.35 by 08:05GMT, or 4:05AM ET, up $6.55, or 0.51%. On Monday, gold rallied to $1,306.00, the most since January 2015.
The dollar extended losses against a basket of six major currencies, slipping to a low of 91.98 at one point on Tuesday, its weakest level since January 2015. It last stood at 92.01, down 0.56% for the day.
In early trading Tuesday, the yen rose to a fresh 18-month high against the dollar, with the greenback trading at 105.57 yen, while the euro hit its strongest level since last August at $1.1592 .
The dollar index has fallen more than 6% so far this year as expectations faded that the Fed would move to normalize interest rates due to fears over a global economic slowdown.
Last week, the U.S. central bank left interest rates unchanged and issued a statement implying it was in no hurry to raise rates.
Prices of the yellow metal are up nearly 22% so far this year. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Elsewhere on the Comex, silver futures for May delivery tacked on 2.4 cents, or 0.14%, to trade at $17.68 a troy ounce during morning hours in London.
Meanwhile, copper futures declined 1.5 cents, or 0.64%, to $2.252 a pound as fears over China's economic health intensified after factory activity shrank for a 14th straight month in April.
The China Caixin manufacturing purchasing managers index (PMI) for April fell to 49.4 from March's 49.7, missing forecasts for 49.9.