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Johannesburg - Gold advanced to the highest in seven weeks while most precious metals gained as doubts over a possible increase in US interest rates this year rose and investors turned the least confident since 2014 that the dollar will strengthen.
Spot bullion climbed as much as 1.1% to $1 168.95 an ounce, the highest since August 24, and was at $1 166.87 by 14:06, Bloomberg generic pricing shows. Prices were up 1.6% last week. Silver advanced 0.8% while platinum gained 0.5%.
Gold’s climbed for three of the past four weeks, rebounding from a five-year low in July, amid speculation that the Fed may refrain from tightening until next year. The chances of a rate liftoff in 2015 are below 40%, futures data show.
While Fed Vice chairperson Stanley Fischer said on Sunday the US economy may be strong enough to merit an increase by year-end, dollar investors shrugged off his comments as a gauge of the US currency touched a three-week low.
“You have the lower interest rates and you have the dollar story,” Georgette Boele, a strategist at ABN Amro Bank NV in Amsterdam, said by phone. “They have a double impact because lower interest rates are usually supportive for precious metals and at the same time the weaker dollar is as well.”
Minutes from the Fed’s meeting in September released Thursday revealed that policy makers were divided, which means they are unlikely to raise rates this year, according to Barclays.
The first increase will be in March, analysts Feifei Li and Nikolaos Sgouropoulos wrote in a report on Monday. Fed-fund futures show a 62% probability for a move in March.
Hedge funds and other money managers cut net bullish bets on the dollar to the least since September 2014 in the week through October 6, according to data from the Commodity Futures Trading Commission in Washington.
Wagers that the currency will rise outnumbered those betting it will weaken, by 196 975 contracts.
The shares in gold producers followed the metal higher.
AngloGold Ashanti [JSE:ANG], the world’s third-biggest producer, advanced as much as 6.1% to the highest since May 15 in Johannesburg as all five members of the FTSE/JSE Africa Gold Mining Index gained. Newcrest Mining rose 1.5% at the close in Sydney.
Impala Platinum [JSE:IMP] led gains among producers of the metal, rising as much as 8.6% to R49.84, the highest in a month. Anglo American Platinum [JSE:AMS] the largest producer, gained 3.1%.
