Investing.com - Gold prices rallied to the strongest level in almost three months in North American morning trade on Thursday, adding to overnight gains as the U.S. dollar sank after the Federal Reserve signaled it was in no hurry to raise interest rates.
Gold for April delivery on the Comex division of the New York Mercantile Exchange rose to a session peak of $1,227.15 a troy ounce, the most since November 17.
It was last at $1,226.15 by 8:45AM ET (13:45GMT), up $17.85, or around 1.5%, after losing $3.10, or about 0.3%, a day earlier.
The Fed held interest rates steady as expected on Wednesday, in its first meeting since President Donald Trump took office.
The U.S. central bank painted a relatively upbeat picture of the economy, noting that job gains remained solid, inflation had increased and economic confidence was rising, although it gave no firm signal on the timing of its next rate move.
Some had expected the Fed to signal that the March meeting would come into play for the next rate hike. The market currently expects the next hike in June, according to Investing.com’s Fed Rate Monitor Tool.
The yellow metal is sensitive to moves in U.S. interest rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
The dollar sank to the lowest level since mid-November against a basket of other major currencies as investors continued to digest the Fed's latest stance on interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell to a daily low of 99.20, a level not seen since November 14. It was last at 99.30 during New York morning hours, down around 0.4%.
The greenback has been under pressure amid growing concern about the potential impact of the Trump Administration’s protectionist stance.
Headlines from Washington will continue to dictate market sentiment as traders focus on Trump for further details on his promises of tax reform, infrastructure spending and deregulation as well as trade policies.
Also on the Comex, silver futures for March delivery jumped 26.2 cents, or 1.5%, to $17.71 a troy ounce, after rising to a more than two-month high of $17.74 earlier.
Meanwhile, platinum tacked on 1.4% to $1,014.00, the strongest level since early November, while palladium climbed around 0.5% to $766.70 an ounce.
Elsewhere in metals trading, copper futures shed 4.2 cents, or 1.6%, to $2.669 a pound.
Prices of the red metal rose to a one-and-a-half year peak of $2.738 on Wednesday with investors watching developments surrounding a strike by workers in Chile at the world's largest mine.