Gold rose to its highest in four weeks on Thursday as the US dollar stepped further away from a 14-year peak with investors locking in gains from its two-month-old rally, and on a technical rebound.

Spot gold was up 0.8 per cent at $1,171.28 an ounce by 0032 GMT. It earlier hit its highest since December 8 at $1,172.96. US gold futures climbed 0.6 per cent to $1,172.50 per ounce.

The dollar index, which measures the greenback against a basket of currencies, was down 0.4 per cent at 102.270.

“It's more of a dollar sell-off than a gold move this morning,” said Jeffrey Halley, senior market analyst at brokerage OANDA in Singapore.

“The dollar is weak across the board and gold itself has technically broken out of its down channel in December.”

Spot gold is expected to rise to $1,182 per ounce, according to Reuters' market analyst for commodities and energy technicals, Wang Tao.

A firmer dollar curbs demand for commodities priced in the greenback by making them more expensive for holders of other currencies.

“Also, there is a little bit of safe haven momentum behind this buying with a certain amount of reality bite as we are only a couple of weeks away from U.S. President-Elect Donald Trump's inauguration and some concerns exist about his potential policies,” Halley said.

Trump has promised tax cuts, infrastructure spending and deregulation, and such changes could boost inflation and might set the stage for a confrontation between a president seeking to boost economic growth and the US Federal Reserve. Halley also said “people in China (the biggest consumer of the yellow metal) are nervous about their economy, with Trump as president and currency control mechanisms, and might be moving some of their annual foreign exchange quotas into gold.”

Starting in July, banks and other financial institutions in China will have to report all domestic and overseas cash transactions of more than 50,000 yuan ($7,201), compared with 200,000 yuan previously.

Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged on Wednesday at 813.87 tonnes. They have dropped about 14 percent since the U.S. presidential election in November. Spot silver, which earlier hit a 3-week high, was up 0.7 percent at $16.54. Platinum, which rose to a near 8-week high of $953.90, was 1.5 percent higher at $953.60. Palladium rose more than 1 percent to hit a near 4-week high of $745.60. The metal has risen 9.7 percent so far this week, its best since the week-ending July 1.

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