Gold inches down after hitting record high yesterday, yet braces for the third monthly gain

The shiny metal rose to record high on Friday trading to stop its rally after hitting new fresh high yesterday, yet it is girding for the third consecutive monthly advance.

The previous session, gold added $8.50 or 0.56% after closing at $1536.10, while gold price was setin London at $1535.00 per ounce inclining from $1531.00 during the AM fixing.

Spot gold is trading at $1533.04 an ounce after recording a high of $1537.22 and a low of $1532.10.

Gold is heading for highest monthly advance since November 2009 as the weak dollar enhanced demand on the metal as a store of value and alternative investment.

The dollar fell tremendously against majors since the end of last year and retreated this week after the Fed kept interest rate low at the range between 0.0% and 0.25% and announced its resume to the 600 billion bond-purchase program which is scheduled to end in June.

In addition, the dovish tone by the chairman of the Fed increased speculations that the Fed will not tighten monetary policy any soon, hence encouraging them to leave the dollar and purchase high-yielding currencies.

Yesterday, downbeat data from the US added to the dollar's agony as the annualized GDP for the first quarter cooled down to 1.8% compared with the 3.1% expansion recorded in the fourth quarter. Also, initial jobless claims for the week ending April 23 showed incline in the number of people asking for jobless benefits to 429,000 relative to 404,000 a week before.

The dollar index, which tracks the dollar movements versus a basket of major currencies, fell to the lowest level since July 2008, touching a low of 73.01 compared with today's opening level of 73.10.

With the Fed keeping lose monetary policy and other central banks started tightening, especially the ECB which hiked interest rate in April, the dollar is predicted to show more vulnerability, thereby giving further strength to gold which is estimated to reach $1700 by the end of the current year.

Among other precious metals, platinum rose to $1841.00 from the day's opening of $1839.20, palladium soared to $782.50 from $779.00 and silver ticked down to $48.30 from $48.35, as of 07:50 GMT.