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Singapore - Gold held near a three-week high on prospects that central bank policies will continue to be accommodative, with the European Central Bank embarking on a corporate bond-buying program and investors betting that US rates will stay lower for longer.
Bullion for immediate delivery was little changed at $1,262.36 an ounce by 10:59 a.m. in Singapore, after rising 1.5% to $1 262.80 on Wednesday, the highest close since May 17, according to Bloomberg generic pricing.
The ECB plunged into the corporate bond market on Wednesday, buying the debt of some of the continent’s biggest companies.
In the US, a weak jobs report has upended bets that the Federal Reserve will hike rates at its meeting next week, with traders pricing in zero chance of an interest-rate increase.
The odds of such a move are below 50% until December, according to Fed-fund futures.
"Low or negative sovereign and corporate debt may push investors to either riskier assets or commodities, including gold,” Bernard Aw, a strategist at IG Asia, said by e-mail. "I’m quite positive for gold next week, as US dollar has room to go lower” ahead of the Fed meeting.
Sputtering Dollar
Gold has rallied 19% this year as low rates boost the appeal of the metal, which doesn’t pay interest, while a sputtering dollar and concerns over economic growth spur demand for bullion as a store of value.
The Bloomberg Dollar Spot Index retreated for a third day to the lowest intra-day level since May 5. On Monday, Fed Chair Janet Yellen said the US economy was making progress, while remaining silent on the timing of monetary tightening.
Bullion has drawn strength from dovish Fed commentary, the proliferation of negative rates and renewed safe-haven appeal, said Mark Keenan, head of commodities research for Asia at Societe Generale SA in Singapore.
The Fed meeting is important in shaping the outlook of commodities, and "we expect gold and silver to be among the most sensitive," he said.
China’s markets are closed on Thursday and on Friday for a public holiday. Spot silver rose 0.8% to $17.1788 an ounce, the highest since May 18. The metal rallied 4% on Wednesday. Platinum and palladium were slightly lower.
