Gold climbed the most in five weeks and silver advanced after the Federal Reserve signaled it will take a slow approach to raising interest rates, according to Bloomberg.
The Bloomberg Dollar Spot Index slipped to a one-month low after the Fed on Wednesday cut its longer-term projections for U.S. borrowing costs, while maintaining a forecast for the benchmark rate to rise by year-end. Higher borrowing costs curb gold’s allure because the metal doesn’t pay interest or give returns like other assets such as bonds and equities.
“Gold is up primarily on the dollar and the comments out of the Fed yesterday,” Jonathan Butler, a precious metals strategist at Mitsubishi Corp. in London, said by phone.
Gold for August delivery rose as much 2 percent to a two-week high of $1,200 an ounce and was at $1,199.40 by 7:31 a.m. on the Comex in New York. The volume of futures traded was 41 percent above the 100-day average for the time of day. Bullion for immediate delivery gained 1.2 percent to $1,199.65 in London, according to Bloomberg generic pricing.
Fed Chair Janet Yellen said she wants to see more decisive evidence of economic growth and also warned of a spillover to the U.S. if a resolution isn’t reached on freeing up funds for Greece, where Prime Minister Alexis Tsipras vowed to reject any unfair deal from creditors.
Silver for July delivery rose 2.1 percent to $16.275 an ounce in New York, reaching a two-week high. Platinum for July gained 2 percent to $1,094 an ounce, rebounding from Wednesday’s six-year low. Palladium for September delivery added 0.4 percent to $723.35, after tumbling into a bear market the previous day.