Gold prices edge up as dollar pulls back after Fed

Prices of gold moved higher on Thursday, buoyed by a slightly softer dollar but the upside for the precious metal looked likely to remain limited ahead of Friday’s U.S. employment report, which could provide fresh impetus to the dollar.

Gold futures for June delivery on the Comex division of the New York Mercantile Exchange were up $4.40 or 0.34% to $1,310.20 a troy ounce by 07:57 AM GMT.

Prices of the precious metal hit a low of $1,302.40 on Tuesday, which was the weakest level since March 1.

The dollar backed off four-month highs against a currency basket on Thursday, but remained supported after the Federal Reserve indicated that it is on track to keep gradually raising interest rates.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, eased 0.15% to 92.45. A weaker U.S. currency makes dollar-denominated gold less expensive for overseas buyers.

The Fed, in a statement released after its two-day policy meeting, acknowledged a recent pick-up in inflation, leaving it on track to deliver its second rate increase of the year when it meets in June.

Expectations for a faster pace of rate hikes tend to be bearish for gold, which struggles to compete with yield-bearing assets when interest rates rise.

In other precious metal trade, silver futures were up 0.61% to $16.47, while platinum futures added on 0.75% to trade at $900.50.

Among base metals, copper futures gained 1.25% to $3.108 a pound.