Gold hit a one-week high on Thursday after the US Federal Reserve signaled a cautious stance on interest rate policy this year, pushing the dollar to its lowest in a month. The Fed on Wednesday raised interest rates for the second time in three months, with officials sticking to their outlook for two more rate hikes this year and three more in 2018.
Fed Chair Janet Yellen said that the central bank would stick to a gradual path of interest rate rises even if inflation runs above its 2 percent target.
Spot gold had risen 0.6 percent to $1,226.21 per ounce at 0623 GMT after touching $1,226.95, the highest since March 7, earlier in the session. US gold futures for April delivery were up 2.1 percent at $1,226.3 an ounce.
"Yellen reiterated that future rate increases would be 'gradual', with this key word bestowing a dovish tone to the outlook," said INTL FCStone analyst Edward Meir.
"The market will be looking at the French election coming up relatively soon," ANZ analyst Daniel Hynes said.
Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.53 percent on Wednesday.
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