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Gold heads for best week in more than a month on Fed rate view
[SINGAPORE] Gold is heading for the biggest weekly increase in more than a month as investors scaled back expectations for further interest-rate increases in the US, raising the appeal of the metal as a store of value.
Bullion for immediate delivery traded at US$1,237.07 an ounce by 9:38 am in Singapore for a gain of 1.2 per cent this week, the most since the period to March 4, according to Bloomberg generic pricing. Prices jumped 1.5 per cent Thursday.
Gold posted its best quarterly gain in three decades through March as worries about global growth and market turmoil prompted the Federal Reserve to delay further rises in borrowing costs. Traders see a less than 50 per cent chance that the Fed will tighten rates even once this year, benefiting gold as it becomes more competitive against interest-bearing assets. Asian stocks are set for a third weekly drop as part of a global selloff.
"Gold had another strong night overnight, owing to the decline in risk assets," Jordan Eliseo, Sydney-based chief economist at trader Australian Bullion Co, said by e-mail.
"It has been re-recognized as a safe haven by the market in the first quarter. The market has a strong base around US$1,200, and could well move higher from here."