Gold stayed near a three-month top on Thursday after marking its best day in two weeks as the US dollar slid after investors scaled back expectations for a near-term US interest rate increase.
FUNDAMENTALS
* Spot gold was little changed at USD 1,141.01 an ounce by 0040 GMT, after rising as high as USD 1,145.60 on Wednesday, its loftiest since October 30. Gold rallied 1.2 percent overnight, the biggest single-day gain since January 20.
* US gold for April delivery was flat at USD 1,141.90 an ounce.
* Financial conditions have tightened considerably in the weeks since the Federal Reserve raised rates and monetary policy makers will have to take that into consideration should that phenomenon persist, William Dudley, president of the Federal Reserve Bank of New York, told MNI in an interview.
* Those comments dragged down the dollar overnight, adding to market expectations that the Fed is unlikely to raise rates again in March. US rates rose for the first time in nearly a decade in December.
* Also cooling US rate hike views, activity in the US services sector slowed to a near two-year low in January, suggesting that economic growth weakened further at the start of the first quarter even as the labour market remains resilient.
* The weaker dollar plus hopes that US rates would remain unchanged next month boosted gold, which has risen nearly 8 percent this year. Volatility in other assets also burnished gold's appeal.
* Holdings of top gold-backed exchange-traded fund, SPDR Gold Trust, continued to rise, standing at 22.19 million ounces on Wednesday, the highest since late October.
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