By Peter Hobson
Gold prices hit a three-month high on Thursday after the minutes of the latest Federal Reserve policy meeting further dampened expectations of an interest rate hike in March, lowering U.S. bond yields and stalling upward momentum in the dollar.
Spot gold was on track for its biggest daily gain since Feb. 6, rising 0.9 percent by 1611 GMT to $1,249.05 an ounce, its highest since Nov. 11. U.S. gold futures rose 1.3 percent to $1,250.
“The dollar’s backed off, bond yields have backed off, and that’s given a bit of support for gold,” said Robin Bhar at Societe Generale.
A weaker dollar makes gold cheaper for holders of other currencies, while lower yields reduce the opportunity cost of holding non-yielding bullion. Higher interest rates would lift yields.
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