Gold price extends post-Fed gain as dollar slips to multiweek lows

London (Mar 20)  Gold futures gained Monday as the dollar index dropped to its lowest in over a month. Gold on Friday recorded its strongest weekly climb since early February, following last week’s surprisingly dovish Federal Reserve stance on interest rates that depressed the currency and lifted the yellow metal.

Monday’s “move seemed to reflect lingering reverberations from the [Fed] rate decision. The central bank raised rates as widely expected, but offered nothing to propel the hawkish narrative beyond status-quo projections,” said Ilya Spivak, currency and metals analyst with Daily FX.

Early Monday, April gold GCJ7, +0.12%   rose $2.90, or 0.2%, to $1,233.10 an ounce. A close at this level would be its highest since early March. Gold gained about 2.4% last week, which was the strongest such gain since the week ended Feb. 3, according to FactSet data.

The Fed last week lifted benchmark interest rates by a quarter-point as was widely expected. But the central bank’s statement and forecasts for future rate increases were seen as less aggressive than had been anticipated.

A measure of the dollar’s strength, the ICE U.S. Dollar Index DXY, -0.07%  , was down 0.1% at 100.19 Monday, trading around its lowest level since early February. Weakness in the buck can make assets priced in the currency, like gold, more appealing to those using other monetary units to buy it.

Meanwhile, silver for May delivery SIK7, +0.04%   added 2 cents, or 0.1%, to $17.43 an ounce. Silver’s weekly gain of 2.9% last week was its best since early January.

In exchange-traded funds, the SPDR Gold Trust GLD, +0.27%   added 0.4% premarket, while the VanEck Vectors Gold Miners ETF GDX, -0.44%   was 0.4% lower.

Source: MarketWatch