Gold climbs to 3-month high as silver gains on Fed speculation

Washington: Gold climbed to a three-month high and silver rallied for a fifth day on speculation that weaker economic prospects in the US mean the Federal Reserve may delay increasing interest rates.

Interest rates should be held near zero until early 2016 because inflation is still too far below the bank’s goal, Charles Evans, Fed Bank of Chicago President, said on Monday in Stockholm, according to prepared remarks. The Fed will release on Wednesday the minutes of its latest meeting. Data last week showed US consumer sentiment plunged the most in two years and factory production stalled in April.

“Disappointing data mean that the Fed will probably wait longer before raising interest rates,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by e-mail.

Gold for immediate delivery rose 0.5 per cent to $1,230.40 (Dh4,515.6) an ounce in London, Bloomberg generic pricing shows. The price earlier reached $1,232.44, the highest since February 17. The metal for June delivery climbed as much as 0.5 per cent to $1,232 on the Comex in New York.