Gold Jumps as Fewer Fed Officials See Multiple Rate Hikes in ’16by
Number of officials who see just one move rose to six from one
Fed says pace of improvement in the labor market has slowed
Gold for immediate delivery advanced as fewer Federal Reserve officials expect the central bank to raise U.S. interest rates more than once this year.
While the median forecast of 17 policy makers remained at two quarter-point hikes this year, the number of officials who see just one increase rose to six from one in the previous forecasting round in March, according to projections by the Federal Open Market Committee on Wednesday. Low rates are a boon to gold, which doesn’t offer yields.
Gold has rallied more than 6 percent this month as concern over the global economic-growth outlook and Britain’s referendum on leaving the European Union spur demand for the metal as a store of value. The dollar fell after the Fed’s projections, boosting the appeal of bullion as an alternative asset.
“It sends a good news story for gold that you might get a weaker dollar on a lack of support from a rise of interest rates,” said Steven Dunn, the New York-based executive director and head of North American distribution for ETF Securities.
Traders put the odds of a U.S. rate increase in July at about 10 percent, down from 53 percent at the start of this month, Fed funds futures show.
Gold for immediate delivery gained 0.8 percent to $1,295.61 an ounce at 2:29 p.m. New York time.