• Spot gold was up 1.4 percent $1,360.23 an ounce at 2:05 p.m. EST (1905 GMT). U.S. gold futures for February delivery settled up $19.60, 1.5 percent, at $1,356.30 per ounce.
• Gold prices rose on Wednesday, hitting their highest since August, 2016, as investors sought insurance against possible inflation after U.S. Treasury Secretary Steven Mnuchin welcomed a weaker dollar.
• Spot silver prices hit a four-month high, following the precious metals complex, traders said.
• The dollar index touched three-year lows after Mnuchin said a softer dollar was good for the United States.
A decline in the dollar makes commodities priced in the greenback cheaper for buyers using other currencies.
• "It all comes down to if the dollar continues to stay weak and inflation trends upwards, that would be confirmation that we have inflationary pressures building, which would move gold up further," said Rob Lutts, chief investment officer of Cabot Wealth Management in Salem, Massachusetts, adding the next support level would be around $1,360 per ounce.
• U.S. President Donald Trump was due to speak on Friday at the World Economic Forum in Davos, Switzerland. Investors are concerned he will use the speech to signal a more protectionist policy stance.
• "Global investors are also concerned about potential trade wars ... which is stirring up some risk-aversion trade. That, in turn, is supporting gold," said Richard Xu, a fund manager at HuaAn Gold, China's biggest gold exchange-traded fund.
"I think gold prices will continue to trend higher along with other commodities, so $1,400 (an ounce) is our near-term target," Xu said.
• Gold bulls have had a much nice ride than 'digital gold' bulls over the past month or so. Bullion has been on a tear.
Today it faced the resistance of the 2017 high of $1357 but it's just creeped through to a high of $1358, which is the best since August 2016.
Before the gold bulls get too excited, there is some more resistance at the 2016 high of $1375 but if the US dollar keeps dropping like a rock, that will break too and then the technical path opens up.
• The rally behind gold prices is targeting “a major band of resistance between $1,357 and $1,380,” said head of commodity strategy at Saxo Bank Ole Hansen, adding that if breached, gold could climb above $1,450.
The environment looks bullish for gold, mainly due to inflation expectations, a weak U.S. dollar, overall commodity price trends as well as geopolitical and financial risks.
“Gold continues to take aim at the critical area of resistance between $1,350 and $1,380/oz,” Hansen said in a note published on Wednesday. “A break above $1380/oz could (by using Fibonacci retracements of the 2011-15 selloff) see gold target $1,484/oz.”
• Markets expect an increase to U.S. interest rates in March, which would increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which gold is priced.
• Silver was up 3 percent at $17.57 an ounce, the highest since mid-September.
• "Silver has been following gold," said George Gero, managing director of RBC Wealth Management in New York. "Option expiration is not expected to affect silver much because silver options are not as big as gold options."
• Platinum added 0.8 percent to $1,014.50 an ounce after touching $1,021.20, the highest since Sept. 8, while palladium rose 1.8 percent to $1,111.10.
Reference: Reuters, Forex Live, Kitco
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