Gold Prices hit a two-weeks high on Thursday as the dollar declined from its highest level in more than a decade. U.S. gold futures for February delivery rose 1.36 percent to $1,156 an ounce on the Comex division of the New York Mercantile Exchange. While spot gold was recently up 1.16 percent to $1,154.92 an ounce, the highest level since December 14.
Weaker dollar boosted gold price. The Bloomberg Dollar Spot Index, which weighs the dollar against a basket of other currencies, declined 0.5 percent on Thursday, the first time in four days. It hit the highest level in a decade on Wednesday.
"Gold is not out of the woods yet but yields are a bit lower and the dollar is weaker, especially against the yen and yen-gold has showed a phenomenal correlation since the U.S. election," SaxoBank head of commodity research Ole Hansen said.
Gold has declined more than 8 percent after the U.S. presidential election in November. Fed’s decision to raise rates for the first time this year also put gold price under pressure. Higher interest rate will strengthen dollar, which may lower gold price.
"We are battling a bit here with the $1,150 level and if we make it above that we shall open up towards $1,165 but in order for funds to start getting worried about covering shorts, we probably need to rise above the mid $1,170s," SaxoBank's Hansen said.