NEW YORK/LONDON: Gold rose about 1 percent yesterday after minutes of the last US Federal Reserve policy meeting showed US central bankers concerned about the rising dollar, slowing inflation and economic turmoil in Europe and Asia, feeding the view that interest rates would stay low.
Bullion accelerated gains after the Fed released minutes showing the policy debate heated up last month.
“The main focus for gold investors now is on the Federal Reserve and US monetary policies,” said Daniel Hwang, managing director of trading at Alternative Investments Capital Asset Management LLC in New York.
“Gold prices are likely to rangebound in the near term as traders are now betting that the Fed will not be able to raise interest rates until Q2 or Q3 next year,” Hwang said.
The dollar dropped sharply against a basket of major currencies, sending gold to its third straight daily rise. A stock market rally limited gold’s gains, traders said.
Spot gold was up 0.8 percent at $1,218.79 an ounce by 3:07 p.m. EDT, Its session high was $1,220.60.
Before the Fed released its minutes, bullion briefly gave up early gains as US crude futures tumbled and the dollar index hovered near a four-year high.
US COMEX gold futures for December delivery settled down $6.40 an ounce at $1,206 in heavy turnover. On Tuesday, investors bought gold after the International Monetary Fund cut its global economic growth forecasts and weak German industrial data stoked concerns.
As Chinese markets returned from a one-week holiday, bullion investors were watching the Shanghai Gold Exchange to gauge buying interest in China, the top consumer of the metal.
Reuters
