Gold hit its highest level in three weeks on Thursday after a dovish stance from the Federal Reserve pushed the U.S. dollar to a seven-week bottom overnight.
The precious metal is meanwhile trading higher at $1318.70 after hitting a peak of $1320.41, the highest level since February 28, extending its gains for a fifth straight session.
The breach of resistance located near $1307 helped the metal to climb higher and thereby continue its latest upside wave.
Last night, the Fed ruled out any interest rate hikes this year, compared to December’s projection of two rate hikes in 2019.
Fundamentally, gold takes advantage of lower interest rates on the U.S. dollar since it does not provide any yield for bullion holders.
The Fed also cut its growth forecasts for this year and next, while Chairman Jerome Powell cited external risks such as Brexit, Europe and China slowdown and trade tensions.
Elevating concerns regarding global growth can boost further safety demand on gold, given its safe-haven characteristic.
The probability that the Federal Reserve will cut interest rates this year edged up from 25 percent on Tuesday to 39.5 percent on Wednesday, following the Fed’s policy meeting.
After hitting a low of 95.15, the lowest level since February 1, the dollar index rose to 95.54 today, following nine straight sessions of decline.
The U.S. benchmark 10-year Treasury yield plunged to a low of 2.508
percent, the lowest level in nearly 14 months.