Gold
futures rose to the highest in almost three weeks on declines in the
dollar and speculation that the Federal Reserve will be slow to boost
interest rates.
The
Bloomberg Dollar Spot Index fell to the lowest since June. Traders are
pricing the odds of a rate increase by December at 48 percent, down from
58 percent a week ago. Last week, minutes of last month’s Fed meeting
showed several central bank officials supported a “cautious approach” to
raising rates, and that raising as soon as April would “signal a sense
of urgency they did not think appropriate.”
Gold’s
gains follow its best quarterly rally in three decades as turmoil in
financial markets reduced bets that the Fed would tighten monetary
policy this year, increasing demand for bullion as a store of value.
Lower rates are a boon for gold, which becomes more competitive against
interest-bearing assets. The metal’s rally spurred a 93 percent climb
this year for a gauge of 14 gold producers tracked by Bloomberg
Intelligence.
Gold
futures for June delivery gained 1.1 percent to settle at $1,258 an
ounce at 1:46 p.m. on the Comex in New York, after touching $1,260.90
the highest since March 22. Prices last week climbed 1.7 percent, the
most since March 4.
Source: Bloomberg
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