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Gold climbs to three-week high as rate outlook undermines dollar
[NEW YORK] Gold advanced to the highest level in three weeks as a slump in the dollar boosted demand for alternative assets.
Bullion for immediate delivery rose as much as 0.2 per cent to US$1,260.06 an ounce, the highest price since March 22, after climbing 1.4 per cent on Monday, according to Bloomberg generic pricing. It traded at US$1,255.65 at 9:09 am in Singapore.
Gold has rallied in 2016 as investors scaled back projections for further US rate rises, hurting the greenback. On Monday, the Bloomberg Dollar Spot Index, which tracks the currency versus 10 peers, tumbled in to its lowest level since June.
Adding to concerns, US aluminum maker Alcoa Inc kicked off what's forecast to be the worst American earnings season since the global financial crisis with a slump in profit and sales.
"Gold's price strength is reflecting a more pessimistic tone with respect to the US economy," Gavin Wendt, founding director & senior resource analyst at MineLife, said by e-mail.
"The feeling there is that rates might stay lower-for-longer, which of course is a benefit to gold and the whole commodity index."