Gold extended a rebound from the lowest price in three months after the Federal Reserve indicated that interest rates may rise at a slower pace than estimated.
Gold for immediate delivery added as much as 0.9 percent to $1,177.96 an ounce in Singapore and was at $1,171.29 by 9:31 a.m. in Singapore, according to Bloomberg generic pricing. The metal climbed 1.6 percent on Wednesday, the most since January, after slumping to $1,142.92 on March 17, the lowest since Dec. 1, amid speculation the Fed would soon boost borrowing costs.
Investors had exited gold on expectations the Fed would soon tighten policy for the first time since June 2006. Higher rates curb demand for gold and boost the appeal of assets with better yield prospects such as bonds and equities.
A rate increase in April is unlikely and the central bank won’t tighten policy until it is reasonably confident inflation will return to its target and the job market improves further, Fed policy makers said in a statement. They now expect the federal funds rate to end the year at 0.625 percent, down from 1.125 percent forecast in December.
Gold for April delivery climbed as much as 2.2 percent to $1,177 an ounce on the Comex and traded at $1,169.70.
Silver for immediate delivery rose 0.3 percent to $16.0012 an ounce.
Source: Bloomberg