Gold hits highest in over five months

BENGALURU, Jan 24 (Reuters): Gold prices hit the highest in more than five months on Wednesday after a US official welcomed a weaker dollar and investors sought insurance against uncertainty.

The dollar index touched fresh three-year lows after US Treasury Secretary Steven Mnuchin said a softer dollar was good for the United States (US).

A decline in the dollar makes commodities priced in the greenback cheaper for buyers using other currencies.

Spot gold was up 0.7 per cent at $1,350.43 per ounce at 1042 GMT, while US gold futures for February delivery climbed 1.0 per cent to $1,349.80 per ounce.

"It's the weaker dollar, it's the inflation focus and it's also to some extent the market is continuing to look for a hedge against a world that's becoming incredibly complacent with stocks at record highs," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

"We're honing in on the 2017 high around $1,357, which is going to be the next big level."