Gold hit its highest since mid-November on Thursday after the U.S. Federal Reserve gave no clear signal on the likelihood of a March interest rate increase in its latest statement, prompting another drop in the dollar.
The U.S. currency slipped to a 12-week low against a basket of currencies after the U.S. central bank gave an upbeat view on the economy but no hint of accelerating rate hikes.
Spot gold rose to its highest since Nov. 17 at $1,223.62 an ounce and was up 1.1 percent at $1,222.56 by 1035 GMT. U.S. gold futures for April delivery were up $16.80 at $1,225.10.
“We have the non-farm payrolls tomorrow so I don’t think there will be huge swings today, but having said that, (gold) looks very strong,” he said.
“The $1,219-$1,220 level is important resistance. If we can break $1,225, very quickly we could see $1,250.”
Friday’s non-farm payrolls report is seen as a key barometer of the health of the U.S. economy and will be closely watched for signs that growth is strong enough to support further interest rate hikes.