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Gold rose to the highest level in almost three weeks as the dollar extended declines on the Federal Reserve’s cautious interest-rate outlook.
Bullion for immediate delivery advanced as much as 1% to $1 252.68 an ounce, the highest level since March 22, and was at $1 249.84 in Singapore, according to Bloomberg generic pricing. The metal climbed 1.5% last week, the most since the period to March 4, as a gauge of the US currency weakened for the fifth week in six.
Gold’s gains follow its best quarterly rally in three decades as investors sought out bullion as a store of value amid declines in equities and reduced bets that the Fed will boost interest rates this year. The Bloomberg Dollar Index, which tracks the currency against major peers, lost 0.2% to trade near the lowest level since June.
“The dollar’s weakness is supporting gold,” Gnanasekar Thiagarajan, director of Mumbai-based Commtrendz Risk Management Services, said by phone. “The trend is strong for gold because it failed to go below the $1 200 mark” despite strong US jobs data for March, he said.
RBC Capital Markets raised its average gold-price forecast for this year by 9% on the Fed’s more dovish posture and rising demand, according to a report received on Monday.
Odds that policy makers will move in December have dropped to 49% from 58% at the beginning of last week, based on Fed-fund futures data. Bullion of 99.99 percent purity on the Shanghai Gold Exchange gained as much as 1.2% to 260.50 yuan a gram ($1 257.09 an ounce).
Holdings in exchange-traded funds backed by gold fell 0.7 metric ton to 1 763.6 tonnes on Friday, according to data compiled by Bloomberg. Spot silver rose 0.5%, while palladium gained 0.8% and platinum added 0.9%.
