Gold on Track for Biggest Weekly Rally in Two Months

0
132

Gold on Track for Biggest Weekly Rally in Two Months

Gold rose to its highest on Friday and remained on course for its biggest weekly gain since January as lower expectations for a near-future interest rate hike continue to bolster the price of the precious metal.

Gold futures for April delivery, the most active contract, gained $11.50 an ounce to $1,180.60 on the Comex Division of the New York Mercantile Exchange. The contract had ended the previous session 1.54% on the up at $1,169 an ounce.

Spot gold advanced 0.9% to at $1181.20 by around 1454 hrs GMT having pared earlier gains that had spurred it to $1,184.80 in morning trading.

Spot gold prices have risen more than 2% this week bucking more than two weeks of straight losses.

According to the Bloomberg Dollar Spot Index, which tracks the value of the dollar against 10 other major currencies, gold fell 1% on Friday. The greenback is now on course for its steepest decline in 18 months.

Although a statement by the Federal Reserve Chairwoman Janet Yedlin dropped its promise to be patient in effecting a rate hike, downgraded forecast on economic growth and inflation indicated that the Fed was in no hurry to raise the country’s lending rates for the first time since 2008.

“We obviously saw a slight change in sentiment earlier this week, with Janet Yellen apparently joining an ever-increasing number of central bank doves,” Saxo Bank’s head of commodity research Ole Hansen told Reuters, referring to the Fed chief.

“Rates are still expected to go higher, but bond markets reacted quite strongly.

“U.S. bond yields have had a good negative correlation to gold since December so that is adding support. At the same time it looks like Greece could attract some attention again. I think we will settle into a $1,150 to $1,190 range for now.”

To contact the reporter of this story; Jonathan Millet at john@forexminute.com