Gold hits one-week high as dollar drops

Gold futures rose nearly one percent in American trade away from early March lows, as the dollar index fell off multi-week highs, following earlier data from the US, the world's largest economy, while markets await the Federal Reserve's policy decisions later today. 

As of 01:55 GMT, gold futures due on April 15 rose 0.82% to $1,322.60 an ounce from the opening of $1,311.90, marking March 15 highs, while the dollar index rose 0.38% to 90.03 from the opening of 90.37. 

Earlier US data showed the trade deficit widened to $128.2 billion from $101.5 billion in the third quarter, missing expectations of a $125B deficit, while existing home sales rose 0.4% to an annualized 5.41 million units, compared to a 3.2% drop to 5.38 million in January. 

Now investors await the results of the FOMC's meeting today under new Chair Jerome Powell, as analysts expect policymakers to hike interest rates to between 1.50% and 1.75%, while unveiling their three-year forecasts for growth, inflation, unemployment, and interest rates. 

Federal Reserve Chair Jerome Powell said in his recent Congress testimony that hiking interest rates four times this year would be considered a "gradual pace", bolstering expectations of a March rate hike.

The economy created 313 thousand new jobs last month, while wages slowed down, confirming Powell's expectations that labor would strengthen further before improvements in wages. 

Gold holdings at SPDR Gold Trust, the world's largest gold-backed investment fund, fell on Tuesday by 0.3 tonnes, the first dip in two weeks, to a total of 850.54 tonnes.