Gold prices rallied more than 1% on Tuesday, pushing past the key $1,300 level amid technical buying as the dollar moved lower ahead of Wednesday’s Federal Reserve minutes.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were last up 1.15% to $1,313.20, the strongest level since March 26.
Gold futures closed below the $1,300 level in the previous session as a short-covering rally after U.S. jobs data fizzed out.
The rise in gold came as the US Dollar Index moved down 0.30% to 80.10, from 80.34 late Monday. Market watchers were looking ahead to Wednesday’s minutes of the Fed’s March meeting for further indications on the future direction of monetary policy.
Last week’s U.S. payrolls report came in slightly below expectations, while Fed Chair Janet Yellen said recently that slack in labor markets showed accommodative policies will still be needed for some time.
Comex gold prices have been under heavy selling pressure in recent weeks as upbeat U.S. economic data fuelled expectations that the U.S. central bank will begin to raise rates sooner than previously thought.
Safe haven demand for the precious metal was also boosted by ongoing tensions in Ukraine, after pro-Russian activists in Ukraine's industrial center of Donetsk declared their independence from Kiev.
Gold, seen as a safe haven investment, usually benefits from economic and geopolitical turmoil.
In the physical market, demand recovered somewhat as markets in top buyer China reopened following a holiday.
Elsewhere, in metals trading, silver futures for May delivery advanced 1.31% to $20.16 a troy ounce, while copper futures for May delivery were up 0.14% to trade at $3.043 a pound.