Gold hits 1-1/2 month high as dollar gives up ground

Gold prices rose on Thursday to 1-1/2 month high, as dollar slid to a new 13-month low, adding to the Federal Reserve’s remarks on maintaining low interest rates to help send commodity prices higher.

Gold last traded at $1262.8 an ounce, up from the opening of $1260.0 an ounce, with a session-high at $1263.8 an ounce and low at $1259.9 an ounce.

Gold prices increased following dollar’s drop after Fed maintained its easing monetary policy as a result of persistently sluggish inflation with no outlook for a rebound.

Gold prices and interest rates have an inverse relationship, which underpinned gold prices as the Fed took a bearish stand on inflation outlook.