Gold price touches 3-month peak

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Gold edged up to a three-month high on Thursday, a day after its best day in two weeks, buoyed by expectations that global economic and financial headwinds could make it tough for the US Federal Reserve to raise rates in the near term.
Commodities rallied across the board on Wednesday as the dollar tumbled after William Dudley, president of the Federal Reserve Bank of New York, said that financial conditions have tightened considerably and the weakening global outlook could have “significant consequences” for the US economy.
Spot gold touched $1,147.40 an ounce on Thursday, its highest since Oct. 30, before stabilising.
It was up 0.2 percent at $1,145.16 by 0956 GMT, after rallying 1.2 percent on Wednesday, the biggest daily gain since Jan. 20.
Dudley’s comments, and weaker-than-expected US services sector data, added to market expectations that the Fed was unlikely to raise interest rates again in March and raised doubts about rate hikes later in the year.
Rising US rates make a non-yielding asset such as gold less attractive.
“The (Fed funds futures) now sees only a 12 percent probability of a rate hike in March so I am not expecting the price of gold to drop soon,” said Bernard Dahdah, an analyst at Natixis, adding he expected it to trade around current levels in the next two months.
Gold has now gained nearly 8 percent since the start of this year as uncertainty about the health of the global economy has made financial markets volatile, pushing investors into safer assets.
A Reuters poll forecasts US non-farm payrolls will increase by 190,000 in January, after rising by 292,000 in December.
US gold for April delivery was up 0.4 percent at $1,141.30 an ounce.
Spot silver was up 0.5 percent at $14.757 an ounce, not far below Wednesday’s three-month peak of $14.80.
Spot platinum hit a one-month high of $889.87 an ounce, up more than 1 percent, while palladium was down 1 percent at $504.19 an ounce, after reaching a one-month peak of $515.54 on Wednesday.

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