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Gold rises as Fed minutes suggest little rush to increase rates
[SINGAPORE] Gold advanced after minutes of the Federal Reserve's last meeting hinted that the central bank won't rush to raise US interest rates.
Bullion for immediate delivery increased as much as 0.3 per cent to US$1,142 an ounce and was at US$1,140.30 at 8:55 am in Singapore, according to Bloomberg generic pricing. Prices jumped to US$1,153.75 in intraday trading on Wednesday, the highest since Sept 25 and are heading for a weekly gain.
While Fed officials noted the US economy continued to improve, the committee decided to wait for additional data confirming the outlook for growth, the minutes showed. ABN Amro Bank NV raised its year-end gold estimate by 10 per cent to US$1,100 an ounce on expectations that the Fed will delay its first rate hike since 2006 to next year. Odds of a Fed liftoff in 2015 have fallen below 40 per cent, futures data show.
Fed inaction is positive for prices as higher rates would curb the allure of assets like gold which don't pay interest.