Gold heads for weekly advance as dollar declines on dovish Fed

[NEW YORK] Gold headed for a weekly gain as the dollar dropped after the US Federal Reserve dialed back forecasts for interest rate increases this year, igniting a commodities rebound.

Bullion for immediate delivery climbed 0.7 per cent to US$1,266.89 an ounce by 9:24 am in Singapore, according to Bloomberg generic pricing. The metal is 1.4 per cent higher this week and up 19 per cent for the year.

Traders are pricing in a slower tightening path in the US amid mounting concern over global economic growth. Dovish Fed comments on Wednesday bolstered appetite for riskier assets, sending stocks and commodities higher while an index of the dollar had its largest two-day decline since 2009 on Thursday. A weaker greenback boosts the appeal of precious metals as an alternative asset.

BLOOMBERG