Gold jumped to a one-week high on Tuesday as unnerved investors bought bullion after the dollar was hit by US President Donald Trump's comments on currency devaluation by other countries. Spot gold climbed 1.4 percent to $1,211.15 an ounce by 3:30 pm EST (2030 GMT) after tapping its highest since January 24 at $1,215.37. It was on track to close January up 5.2 percent, its strongest month since June.
US gold futures settled up 1.3 percent at $1,208.60. The US dollar tumbled while stocks cemented their biggest losses in six weeks as Trump added uncertainty to the market following stringent curbs on travel to the United States. The greenback was already weaker after Trump sacked top US government lawyer Sally Yates, who refused to defend his curbs on travel targeting seven Muslim-majority nations.
"Clearly Trump remains the main driver for gold. He has really turned from being a bit of a foe of gold to a friend with the uncertainty of his policies," Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, said. "We're not getting any news on fiscal spending and tax cuts. Instead, we're hearing about protectionism and a tough stance on immigration. That's unnerving the market."
A weaker dollar supported bullion, though traders were also eyeing a two-day Federal Reserve meeting that started during the session, with a statement due on Wednesday at 2 pm EST (1900 GMT), hoping for clues on the outlook for US interest rates. "The big risk this week ultimately is really going to be what the dollar does, and a lot of that is going to hinge on what does and doesn't come out of tomorrow's FOMC meeting," Credit Suisse analyst Christopher Hine said.
In other precious metals, spot silver was up 2.6 percent at $17.55 an ounce after hitting the highest since November 11 at $17.61. "Silver has broken out of its established bearish channel to move above key resistance in the $17.15/25 range," said Fawad Razaqzada, technical analyst for Forex.com. Platinum rose 0.8 percent to $993.40, and was set for its strongest monthly performance since July, while palladium was up 1.9 percent at $754.20.
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