Investing.com - Gold prices were trading near their highest levels in two weeks in European mid-morning trade on Thursday, boosted by a softer dollar after a less hawkish than expected Federal Reserve and growing concerns over trade tariffs.
Gold futures for April delivery on the Comex division of the New York Mercantile Exchange were up $9.7 or 0.73% to $1,331.2 a troy ounce by 05:28 AM ET (09:28 GMT).
The dollar weakened broadly after the Federal Reserve raised interest rates on Wednesday but stuck to its forecast for two more hikes this year.
Some investors had expected the Fed to project three more rate hikes this year so the decision to stick to its forecast for two additional hikes was seen as less hawkish than expected.
Expectations for a slower pace of rate hikes tend to buoy gold, which struggles to compete with yield bearing assets when interest rates rise.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was last down 0.18% at 89.13 after plumbing a one-month low of 89.06 overnight.
A weaker dollar makes gold, which is denominated in the U.S. currency less expensive for overseas buyers.
Prices of the precious metal received an additional boost from increased safe haven demand amid growing concerns over the prospect of a U.S. - led trade war.
U.S. President Donald Trump was expected to unveil up to $60 billion in new tariffs on Chinese imports later in the day. The Trump administration already imposed tariffs on U.S. steel and aluminum imports earlier this month.
Investors are concerned that major U.S. trade partners could retaliate with similar measures and threaten the outlook for global growth.
In other precious metal trade, silver futures were up 0.83% at $16.555 a troy ounce, while platinum futures were little changed for the day at $958.60.