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Gold heads for biggest weekly gain since February on dollar drop
[SINGAPORE] Gold headed for the biggest weekly advance since February as the dollar tumbled to a 10-month low, boosting the appeal of alternative assets. Silver was set for the biggest monthly gain since 2013.
Bullion for immediate delivery traded at US$1,274.24 an ounce at 9:33 am in Singapore, from US$1,266.26 on Thursday when it surged 1.6 per cent, according to Bloomberg generic pricing. The metal is 2.7 per cent higher this week. Silver climbed as much as 1.7 per cent to US$17.8465 an ounce, the highest since January, 2015.
Gold's rally this year was given added impetus after the Bank of Japan on Thursday held off from additional easing and as weaker-than-predicted US growth supported the Federal Reserve's decision to keep monitoring data before hiking interest rates again.
The odds that the Fed may increase borrowing costs in June dropped to 12 per cent from 20 per cent at the beginning of this week. The Bloomberg Dollar Spot Index slumped to the lowest since June as the yen led gains against the US currency this week.
"The BOJ's decision not to ease saw a surge in the yen and stronger investor demand hit the gold market," analysts at Australia & New Zealand Banking Group Ltd, including Daniel Hynes, wrote in a note Friday.