Gold prices have hit a three-month high on a weaker US dollar

by

Gold prices were boosted by a weak US dollar (Source: Getty)

Gold has started 2018 on a positive note as the yellow metal's price rose to its highest in more than three months today.

Gold futures rose 0.31 per cent to $1,313.30 per troy ounce this morning after breaking the psychologically important $1,300 mark on Friday.

The precious metal, a safe haven asset, benefited from a weaker US dollar in 2017.

Read more: Gold prices slip after Trump unveils his tax plan

"With the dollar stumbling into the New Year under renewed selling pressure, gold is likely to remain heavily supported, with prices potentially appreciating towards $1,320 this week," said Lukman Otunuga, research analyst at FXTM.

"From a technical standpoint, the yellow metal is bullish on the daily charts, as there have been consistently higher highs and higher lows.

"With today being the first trading day of 2018 and gold already off to a strong start, it will be interesting to see if the upside momentum elevates the metal beyond $1,320 this month."

Spot gold prices were up 0.68 per cent at $1,311.72 today, having risen 13 per cent in 2017 thanks to the US dollar performing its worst since 2003 last year.

Meanwhile, data from online gold platform BullionVault showed private investors' gold demand hitting a 13-month high in December to end 2017 with a bang. This was the heaviest net demand since November 2016, when Donald Trump won the US presidential election, the firm said.

Adrian Ash, the director of research at BullionVault, said: "For 2018 the key as ever will be what happens to other asset classes. Investor demand for gold is likely to remain muted if the stock market's bull run continues. The best time to buy insurance however is before you need it."

Read more: Bitcoin is not causing a "mass exodus" from gold, Goldman Sachs says

Tags: Gold prices