Gold Rises to 7-Week High as Dollar Alternative
Gold futures rose to a seven-week high as the Federal Reserve’s pledge to keep U.S. borrowing costs low drove the dollar down, boosting demand for precious metals as alternative assets. Silver jumped to a two-month high.
The greenback fell to a six-week low against a basket of currencies. Yesterday, the Fed said that its benchmark interest rate will stay low until at least late 2014, and gold surged 2.1 percent, the most in three weeks.
The central bank’s statement “was very bullish for gold,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “The weakness in the dollar is also helping gold.”
Gold futures for April delivery gained 1.7 percent to $1,731.50 an ounce at 10:15 a.m. on the Comex in New York. Earlier, the metal reached $1,734.50, the highest for a most- active contract since Dec. 8.
The price may “test” $1,800 next week, said Ong Yi Ling, an investment analyst at Phillip Futures Pte in Singapore.
Silver futures for March delivery climbed 1.5 percent to $33.62 an ounce on the Comex. Earlier, the metal reached $33.79, the highest since Nov. 17.
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