Singapore: Gold advanced to the highest in two weeks as the dollar weakened amid speculation the Federal Reserve will stick to a gradual tightening of monetary policy and as investors digested economic data from China.
Bullion for immediate delivery rose as much as 0.7 per cent to the highest since October 5 and traded at $1,270.62 (Dh4,663.17) an ounce at 11:13am in London, according to Bloomberg generic pricing. The metal had climbed 0.9 per cent in the prior two days as a gauge of the dollar retreated from a seven-month high.
Gold has rallied 20 per cent this year, partly helped by the Fed standing pat on rates. Data on Tuesday showed that while the cost of living in the US rose at the fastest pace in five months in September, the increase in prices excluding volatile food and fuel costs trailed estimates. The odds that interest rates will rise by December fell to 63 per cent after the data, down from 66 per cent a day earlier.
Exchange-traded funds
China’s economy, meanwhile, remained stable in the third quarter with gross domestic product rising 6.7 per cent, according to government data Wednesday.
“The probability of a US. Federal Reserve rate hike has fallen slightly again,” Commerzbank AG said in a note to investors Wednesday. Commerzbank said lower yields on US. Treasuries due in a decade and increased holdings in exchange-traded funds were also supporting the gold price.
Gold is set to rise to $1,347.40 an ounce by the time of the next London Bullion Market Association conference in October 2017, according to a survey of people attending this year’s gathering in Singapore, which ended on Tuesday. Silver will gain to $20.90, the survey showed.
