Gold headed for a weekly gain as the dollar dropped after the U.S. Federal Reserve dialed back forecasts for interest rate increases this year, igniting a commodities rebound. Silver touched the highest level in more than four months.
Bullion for immediate delivery climbed 0.4 percent to $1,262.97 an ounce by 10:52 a.m. in Singapore, according to Bloomberg generic pricing. The metal is 1.1 percent higher this week and up 19 percent for the year.
Traders are pricing in a slower tightening path in the U.S. amid mounting concern over global economic growth. Dovish Fed comments on Wednesday bolstered appetite for riskier assets, sending stocks and commodities higher while an index of the dollar had its largest two-day decline since 2009 on Thursday. A weaker greenback boosts the appeal of precious metals as an alternative asset.
“In an environment where the dollar continues to be on the weak side, at least in the very short term, let’s talk about a week or two, there’s maybe room to touch the $1,310 level from a technical perspective,” Dominic Schnider, the head of commodities and Asia-Pacific foreign exchange at UBS Group AG’s wealth-management unit in Hong Kong, said Friday in a Bloomberg Television interview.
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- Holdings in exchange-traded funds backed by gold rose 3.3 metric tons to 1,741.6 tons on Thursday, the highest level since April 2014, according to data compiled by Bloomberg.
- Spot silver rose as much as 1.3 percent to $16.1107 an ounce, the highest level since Oct. 28.
- Palladium added 0.4 percent to $595.30 an ounce after touching $598.15 on Thursday, the highest since Nov. 11, while platinum climbed 0.6 percent.
–With assistance from Rishaad Salamat To contact the reporter on this story: Ranjeetha Pakiam in Singapore at email@example.com. To contact the editors responsible for this story: Jason Rogers at firstname.lastname@example.org, Keith Gosman
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