23 March 2015
Gold Holds Weekly Climb After Dollar Drops Most Since 2011
(Bloomberg) - Gold held the biggest weekly advance since January after the Federal Reserve reduced projections for U.S. interest-rate increases, hurting the dollar. Silver dropped.
Bullion for immediate delivery was at $1,181.86 an ounce at 11:05 a.m. in Singapore from $1,182.54 on March 20, according to Bloomberg generic pricing. The metal -- which rallied 2.1 percent last week as the Bloomberg Dollar Index fell 2.2 percent -- rose to $1,188.07 on Friday, the highest level since March 6.
Fed Chair Janet Yellen suggested last week that the U.S. central bank was in no hurry to raise rates, even as a statement after a policy meeting showed officials dropped a pledge to be patient on tightening. Traders had been exiting gold in anticipation of higher borrowing costs, which usually send investors to assets with better yield prospects such as stocks. Gold typically trades counter to the U.S. currency, which was little changed on Monday against a basket of 10 major peers.
“The potential for higher interest rates in the U.S. now holds fewer fears for investors as they contemplate a scenario in which there are only marginal increases in rates over the next 12 months,” CMC Markets wrote in a note.
Fed officials on March 18 lowered their estimate for where borrowing costs will be at the end of 2015 to 0.625 percent, from December’s estimate of 1.125 percent. Officials scheduled to speak on Monday include Cleveland Fed President Loretta Mester, a non-voting member of the rate-setting Federal Open Market Committee, and San Francisco Fed President John Williams, who does vote.
Gold for April delivery fell 0.2 percent to $1,181.90 on the Comex. Silver for immediate delivery dropped 0.3 percent to $16.7017 an ounce. Spot platinum was little changed at $1,138.38 an ounce, while palladium lost 0.3 percent to $774.75 an ounce.