Gold Surges to One-Month Peak on Softer Dollar and Lower Oil

Gold prices have hit their highest level in a month after a softer dollar and lower oil prices. Spot gold rose by 2.4% to $4,175.53 per ounce on Wednesday, its highest since July 7. U.S. gold futures also climbed 2% to $4,235.30.

The weaker greenback made metals priced in dollars more attractive to holders of other currencies. Lower oil prices can ease inflation concerns that shape expectations of higher interest rates.

Kelvin Wong, a senior market analyst at OANDA, said 'Gold's relation with oil is still intact as oil prices have a tremendous impact on the global economy in terms of inflationary pressure.' He added that if tensions between the U.S. and Iran continue to de-escalate, gold prices could move higher.

Federal Reserve Bank of Philadelphia President Anna Paulson said she was keeping an 'open mind' about what lies ahead for monetary policy, which could call for higher interest rates. The probability of a Federal Reserve interest rate hike at its September 15-16 meeting is now priced in at 59%, down from 67% the day before.