By Katherine Dunn
LONDON--Gold prices approached a one-month high on Thursday, as a weaker dollar helped the metal regain momentum following a swift selloff late last year.
Spot gold rose 0.24% to $1,171.39 per troy ounce in midmorning trade in Europe, the highest price since Dec. 7.
Gold is up about 1.68% since trading began for the year on Tuesday, after a swift decline in the gold price following the U.S. election in November nearly wiped out 2016's gains.
The WSJ Dollar Index fell by 0.14% on Thursday. A weaker dollar typically helps gold prices rise, because it makes the metal more affordable for investors who hold other currencies.
"Januaryis more often than not a positive month for gold and this may well happen again," said David Govett, head of precious metals at Marex Spectron in London. However, "we are governed by the greenback and this will dictate the direction regardless of sentiment and history."
Minutes from the December Federal Reserve meeting, released on Wednesday, which expressed "considerable uncertainty" about the impact a Donald Trump presidency will have on the American economy also helped gold gain ground on Thursday.
Investors are also regaining a taste for the metal as a hedge against "a lot of uncertainty," including the start of Donald Trump's presidency and uncertainty about the strength of Chinese growth, said Robin Bhar at Société Générale.
Meanwhile, physical demand for the metal is picking up ahead of Chinese New Year, which begins later this month, Mr. Bhar added. China, alongside India, is one of the world's biggest buyers of physical gold, particularly around holidays.
Looking forward, Friday will bring the U.S. jobs figures for December, which could provide further clues on the health of the American economy, and affect the strength of the dollar.
The other precious metals were mixed on Thursday. Silver was up 0.18% at $16.55 a troy ounce, platinum was up 0.99% at $953.30 a troy ounce, and palladium was down 1.32% at $732.85 a troy ounce.
Write to Katherine Dunn at Katherine.Dunn@wsj.com
(END) Dow Jones Newswires
January 05, 2017 06:58 ET (11:58 GMT)
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