Gold prices bounced up overnight as US investors reacted to comments from Donald Trump that sent the dollar tumbling.
Investors were shaken after the US President said he thought the dollar was "getting too strong" and that he'd like the Federal Reserve to keep interest rates low in an interview with the Wall Street Journal last night.
"Donald Trump has already made many U-turns after his election, but yesterday’s one is of primary concern to currency traders," said FXTM chief market strategist Hussein Sayed.
During his campaign, Trump accused Fed chair Janet Yellen of being "political" and "doing what Obama wants her to do", by keeping rates at zero, but now he likes a low-interest rate policy and may reappoint Yellen to a new four-year term, Sayed said.
"The dollar slumped on the news, and while it has steadied this morning the dollar index is struggling to hold on above the 100 level," said David Morrison, senior market strategist at SpreadCo.
Gold soared above $1,280 last night, and now it is back to highs last seen around the time of the US election in November.
The yellow metal is now trading 0.72 per cent higher at $1,287.30 per ounce.
Sayed added: "Gold is approaching the key $1,300. The precious metal is benefiting from three main factors at the moment - the dollar’s weakness, ongoing geopolitical tensions, and breaking above key resistant points on the charts. I think that investors don’t want to dump equities aggressively as we enter the earning season. Instead, they are keeping holding equities and adding some safe havens on the side, which is likely to keep gold supported."
The rise is having a knock-on effect to the share prices of gold miners. Randgold Resources shares were trading 1.14 per cent higher at 7,510p while Fresnillo was trading 1.54 per cent up at 1,640.9p.