Gold hit its highest level in a week in Asia on Thursday as the dollar weakened against the euro after US Federal Reserve Chairman Alan Greenspan offered no surprises in his testimony before the Congress. By 0204 GMT, spot gold was at $423.35/423.85 an ounce, having reached a 1-week high at $423.75 an ounce. That compared with $422.10/422.80 an ounce last quoted in New York.
Greenspan said on Wednesday that the US economy was solid but gave no clear idea how high the Fed would raise interest rates.
He also warned about "significant uncertainties" such as high energy prices, labour costs, the future path of long-term interest rates and the danger this could spell for the country's housing market.
The euro was higher than New York levels at around $1.2180. A softer dollar makes dollar-priced gold more attractive for holders of other currencies.
"The market went through a phase of buying this morning before a little bit of selling came back. But the momentum should take gold back up to $425 today," said one dealer in Singapore, referring to immediate resistance.
Dealers pegged support levels at $418 and $415 an ounce. Movements of the dollar against other currencies, particularly the euro, would provide direction, they said. The Fed has raised rates in nine quarter-percentage point steps since June last year to 3.25 percent. Higher interest rates make dollar-denominated assets more attractive to global investors. In other precious metals silver was at $7.08/7.10 an ounce, versus $7.02/7.05 in the US market. Platinum was at $872.50/877.50 an ounce, versus $872/875.
Palladium was at $188/193 an ounce, compared with $189/192 in New York.
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