London — Gold prices hit a four-month peak on Monday as the dollar index slumped to its lowest in three years but analysts warned the greenback’s decline could be short-lived as it was not driven by fundamentals. Spot gold was up 0.3% at $1,342.11/oz by 10.45am GMT after touching its strongest since September 8 at $1,344.44. The precious metal rose for a fifth consecutive week last week, gaining 1.4%. US gold futures were up 0.6% at $1,343.20/oz. "The weakness in the dollar is not justified by fundamentals. It’s a little bit weird considering the divergence in monetary policy should play in favour of a stronger dollar," Capital Economics analyst Simona Gambarini said. She said the US Federal Reserve was widely expected to raise interest rates, which would favour a stronger dollar, while the European Central Bank (ECB) should keep rates on hold. The dollar index was down 0.2% at 90.474, having reached its weakest since January 2015 at 90.421. A lower greenback makes dollar-denominate...
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