Gold hit a three-week high above $960 an ounce on Friday as buying linked to the weaker dollar pushed the metal through technical resistance, before paring gains after U.S. consumer sentiment data pressured the euro.

Spot gold hit a high of $961.00 an ounce, its firmest level since Aug. 7, and was bid at $955.10 an ounce at 1434 GMT, against $946.75 an ounce late in New York on Thursday.

Prices rose after heavy selling of the dollar late on Thursday, particularly against the Swiss franc, knocking the U.S. currency to multi-week lows versus the euro.

“In the near term is it still predominantly the currency that is in the driving seat,” said Saxo Bank senior manager Ole Hansen.

“That has managed to tip (gold) through a technical level where new buying and short covering has been triggered this morning, and that has given us a bit of momentum on the upside.”

Gold typically moves in

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Gold rose more than 2 percent in Europe on Monday as the dollar slipped to a fresh two-month low versus the euro, boosting interest in the precious metal as a currency hedge.

Gold was held below $830 an ounce for much of the day by technical resistance, but stops were triggered as the rising euro pushed prices higher, leading to a spike to a two-month high of $842.15 an ounce.

Spot gold was quoted at $840.05/842.05 an ounce at 1533 GMT, against $819.90 an ounce in New York late on Friday.

Traders are awaiting an announcement on interest rates from the U.S. Federal Reserve on Tuesday, which will have a significant impact on the foreign exchange market, and consequently on gold.

“On the currency side, the high