Bullion prices increased more than 6 percent so far this year on speculation that the US Federal Reserve would soon begin to retract its aggressive rate hike policy.
In nine months, while international gold prices have climbed to their greatest closing level, the Indian markets are also making all-time highs for the last four to five sessions. Since early November, the metal has risen on indications that the Federal Reserve is becoming less hawkish, which has led to decline in the dollar and Treasury yields.
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Spot gold was steady at $1,937.09 per ounce, as of 0249 GMT, after hitting its highest since late April 2022 on Tuesday. US gold futures were up 0.2 percent at $1,940.00.
"If you look at the dollar, it's now trade-weighted basis back to levels or down to levels that we saw last in June 2022. So, I think that is certainly one of the key factors helping to support the gold prices," said Philip Newman, MD at Metals Focus in an interview with CNBC TV-18.
"People at UCB are looking to lift rates and maintain rates fire for longer and that sort of sits against market expectations at the least that the Fed will start to adopt a much more dovish stance. Hence, why we've seen the dollar come under pressure and therefore support gold," he said.
Market focus is now on the fourth-quarter US GDP data due on Thursday, which could set the tone for the Fed's January 31-February 1 policy meeting.
The Fed is widely believed to increase the rates by 25 basis points (bps) at its policy meeting next week. After four consecutive 75-bp rate hikes, the US central bank lowered its tightening pace to 50 bps last month.
Investors may favour zero-yield gold since reduced interest rates translate into lower returns on interest-bearing assets like government bonds.
According to data released on January 24, Switzerland's gold exports to nations including China, Turkey, Singapore, and Thailand surged to multi-year highs in 2022.
Among other precious metals, spot silver fell 0.2 percent to $23.62 per ounce and platinum fell 0.2 percent to $1,054.40. Palladium rose 0.1 percent to $1,745.38.
