Investing.com - Hopes of the Federal Reserve holding on rates is flushing more bulls out of the dollar and into gold, driving the yellow metal to near eight-month highs above $1,300.
On the New York Mercantile Exchange's Comex division, the most-active futures contract settled up $5.10, or 0.4%, ar $1,309.30 per ounce.
The spot price of gold traded at $1,302.88 per ounce by 1:40 PM ET (18:40 GMT), after reaching $1,304.49 earlier, its highest since early June.
The rally in the yellow metal came as the dollar continued to sink on bets that Federal Reserve Chairman Jerome Powell might sound another dovish note in his Wednesday news conference after the central bank’s monthly meeting, where the Fed is widely expected to hold interest rates steady.
The Fed raised rates four times last year. Since then, Powell has indicated a willingness to be "patient" with monetary tightening, saying it will be based more on economic performance as a whole rather than just inflation. Other Fed governors have also suggested they might tilt toward keeping rates flat for a while.
The dollar index, a contrarian trade to gold and which measures the greenback against six major currencies, hit two-week lows on Monday.
Investors in precious metals are also awaiting the outcome of U.S.-Sino trade talks, which resumes in Washington this week ahead of a March 1 deadline for a deal that would avert further U.S. tariffs on Chinese exports to America. The dollar rallied last year as the yuan slumped on worries over the trade war, although the Chinese currency has rebounded lately, weighing on the dollar.
The spot price of palladium traded at $1,332 per ounce, down $30.90, or 2.3%..
Spot palladium hit all-time highs of $1,440.35 on Jan. 17, making it the world's most valuable traded metal currently, although gold had reached record highs above $1,900 previously.
The most-active palladium futures contract on Comex fell $27.15, or 2.1%, to $1,292.65 per ounce.
In other precious metals on Comex, silver futures gained 6.3 cents, or 0.4%, to $15.76 per ounce.
Platinum futures slid by $4.90, or 0.6%, to $813.40 per ounce.
In base metals,copper fell 4.8 cents, or 1.8%, to $2.68 per pound.