Gold prices have hit a two-week high as the US dollar continues to edge lower

Courtney Goldsmith
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Photo taken on April 29, 2010 in Paris s
The price of the yellow metal has lifted today (Source: Getty)

Gold has built on gains made last week as the US dollar slides to six-week lows.

The yellow metal edged up $5.30 to $1,235.50 per ounce, hitting a two-week high, after making substantial gains following the Federal Reserve's decision to hike interest rates last week.

"Gold has continued its rally that began after Wednesday’s Fed meeting, with the fresh US dollar weakness overnight helping the precious metal to break above the $1,231 mark," said Henry Croft, analyst at Accendo Markets.

"The next level of resistance the safe-haven asset will be looking to challenge is the $1,237, although a packed Fed roster this week may prove to be a hindrance," Croft added.

The Fed's decision to lift interest rates for the second time in three months sent the dollar and US Treasury yields tumbling.

It also defied trading floor expectations for a hawkish shift in policy when it said it will stick to its forecast of just two more rate increases this year.

The dollar has booked its fourth straight day of losses for the first time since early November.

"Sentiment towards the dollar has deteriorated significantly," Societe Generale FX analysts said in a note.

Read more: The Fed has hiked interest rates, sending the dollar tumbling

Earlier this month, the safe haven asset dipped below $1,200 an ounce. Meanwhile, recent data from BullionVault suggested demand for the yellow metal eased in February.

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