Gold hits new high on Fed statement and weak dollar

Gold hit record highs yesterday as the dollar\'s three-year low against a basket of major currencies attracted non-US investors, after the US signalled it would retain accommodative monetary policy. Spot gold ascended to a lifetime high of $1,535.90 an ounce, breaking records for a second straight session. It traded at $1,534.85, up from $1,526.40 late in New York on Wednesday. The dollar index, a measure of the greenback\'s strength against a basket of major currencies, dipped to a three-year low after the US Federal Reserve signalled no rush to reverse low interest rates in order to support economic recovery. The dollar held to losses after data showed US economic growth slowed more than expected in the first quarter, while other data showed a rise in weekly US jobless claims. \"In the last few days the gold price has shown that it\'s fully dependent on the US dollar, and the US dollar seems to be relatively unimpressed by the US data coming out,\" said Commerzbank analyst Daniel Briesemann. US gold futures also hit an all-time high at $1,535.10 an ounce and then trimmed gains to $1,532. The weakening dollar has been a key driver behind gold\'s rally in recent weeks, alongside concerns over civil disruption in the Middle East and North Africa, sovereign debt problems in the Eurozone and rising inflation worldwide. \"Everything is dollar-related and safe-haven buying,\" said MKS Finance head of trading Afshin Nabavi. \"The Fed decision was not really a surprise. Nothing has changed, but the tone of the statement from Bernanke left the impression that it is going to be awhile before any rate hikes will be considered.\" The dollar shrugged off data showing US home resale volumes bounced back in March — a hopeful sign for recovery in the housing market, but prices continued to decline. Physical gold buying was seen active in Asia, while scrap selling was limited as market participants remained bullish even after gold struck record highs in nine out of the past ten sessions, dealers said. Spot silver, which has rocketed more than 50 per cent so far this year, rose to $49.16 an ounce against $47.76 an ounce late in New York on Wednesday.