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Gold holds gains as US dollar drops after Fed dials back rate view
[SINGAPORE] Gold held its biggest weekly advance in two months as the US dollar weakened after the Federal Reserve refrained from raising interest rates and scaled back tightening plans.
Bullion for immediate delivery rose 0.1 per cent to US$1,338.91 an ounce at 8:15am in Singapore after a 2.1 per cent gain last week, the most since the period to July 29, according to Bloomberg generic pricing.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, fell 0.1 per cent on Monday, following last week's 0.6 per cent decline.
Gold is headed for a third quarterly gain in what would be the longest rally since 2011, when prices rose to a record. Last week, the Fed trimmed its projection for rate hikes next year to two from three, while the Bank of Japan shifted the focus of its stimulus from expanding the money supply to controlling interest rates.
"Gold remained well-bid as investors continue to view the Fed's outlook of lower rates in 2017 as a positive," Australia & New Zealand Banking Group Ltd said in a note.
Citigroup Inc has warned that gold may be in for a bumpy ride in the final quarter as Republican candidate Donald Trump now has a 40 per cent chance of winning the presidential election. The first of three US presidential debates will be held Monday ahead of the Nov 8 vote.