By Renita D. Young and Zandi Shabalala
NEW YORK/LONDON (Reuters) - Gold rose to a one-week high on Tuesday as the dollar weakened after U.S President Donald Trump criticized the Federal Reserve for raising interest rates.
A weaker dollar generally boosts the price of dollar-denominated gold.
Spot gold gained 0.3 percent at $1,194.12 by 1:44 p.m. EDT (1744 GMT), after touching $1,196.27 earlier, its highest since Aug. 14. The precious metal was gaining for the third straight session.
U.S. gold futures for December delivery settled up $5.40, or 0.5 percent, at $1,200 per ounce.
"Presumably this is due mainly to the U.S. dollar, which is depreciating significantly after U.S. President Trump harshly criticized the US Fed’s monetary policy," Commerzbank said in a note.
Trump said in an interview with Reuters that the U.S. central bank should do more to help him to boost the economy.
Trump made his first departure from a tradition of American presidents rarely criticizing the Fed in July when he condemned the U.S. central bank's monetary policy tightening.
Although Trump's comments helped gold rise, Julius Baer analyst Carsten Menke said they would not fundamentally change the outlook for bullion or monetary policy in the United States.
"In the end what determines the outlook for U.S. monetary policy is the health of the U.S economy," he said.
Gold is highly sensitive to rising U.S. rates as it increases the opportunity cost of holding non-yielding metal while boosting the dollar.
The U.S. central bank has raised interest rates twice this year and is targeting two more hikes. However, Atlanta Fed President Raphael Bostic maintained his expectation for only one more interest rate hike this year.
The Russian Central Bank continued to increase its gold holdings in July, taking advantage of low gold prices Commerzbank said.
Resistance for gold sits at $1,200.70, the 38.2 percent Fibonacci retracement level of the July high to August low range, while support is at $1,146.20, which is the January 2017 low, ScotiaMocatta said in a note.
Investors anticipated the release of the Fed's August policy meeting minutes on Wednesday and the bank's annual symposium at Jackson Hole, Wyoming, later this week.
Markets also focused on a U.S.-China trade meeting this week, but Trump said on Monday he did not expect much progress from talks with Beijing.
Elsewhere, platinum gained 0.3 percent at $796 an ounce, having touched its highest in a week, $803.10. Spot silver climbed 0.4 percent at $14.77 an ounce and palladium edged up 0.5 percent at $915.10.
(Additional reporting by Apeksha Nair and Sumita Layek in Bengaluru; Editing by Louise Heavens and Mark Potter)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Aug 22, 2018 00:05:28 IST