Gold Passes $1,300 as Investors See Rates Remaining Low Longer

  • Weaker U.S. dollar, looser monetary policies boost buying
  • Platinum also advances, while silver and palladium decline

Gold Tops $1,300 an Ounce: Bullish or Cautious?

Gold advanced above $1,300 an ounce for the first time since January 2015 on speculation central banks from the U.S. to Europe will maintain low interest rates, spurring demand for the metal.

Federal Reserve policy makers last week left benchmark interest rates unchanged. This raises gold’s appeal as the metal generally gives investors returns only through price gains. The Bloomberg Dollar Spot Index touched the weakest since May 2015.

Investors have flooded back to precious metals this year as risks to the global economy prompted the Fed to signal it will take a slower approach to further interest-rate increases, weakening the dollar.

“We believe that there’s a lot of things that are ripe for precious metals right now: a low interest-rate environment, interest-rate expectations backing down again and we have a weaker dollar,” Chris Gaffney, president of EverBank World Markets in St. Louis, said in a telephone interview. “We believe this is just the start of a push higher for the precious metals.”

Gold futures for June delivery climbed 0.4 percent to settle at $1,295.80 an ounce at 1:54 p.m. on the Comex in New York. Earlier, the price rose as much as 1.2 percent to $1,306, the highest since Jan. 22, 2015. The precious metal has gained 22 percent this year. Markets in Asia and London were shut for holidays.

In other precious metals:

  • Silver futures for July delivery fell 0.8 percent to $17.682 an ounce on the Comex
  • On the New York Mercantile Exchange, platinum gained, while palladium dropped
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