You are here
Gold rises as traders 'unconvinced' about April rate increase
[NEW YORK] Gold climbed after disappointing US housing data led investors to discount comments from Federal Reserve officials that signaled an interest rate hike could happen as soon as next month.
Bullion for immediate delivery advanced as much as 0.4 per cent to US$1,248.20 an ounce and was at US$1,247.59 by 2:29 pm in Singapore, according to Bloomberg generic pricing.
Gold has rallied 18 per cent this year, making it the best performing major commodity, as the dollar hovers near a nine-month low.
While two Fed officials said recent economic data may justify additional tightening, sentiment was damped by data showing sales of previously owned US homes dropping more than forecast in February.
"Disappointing housing data released yesterday makes a case for accommodative monetary policy," Madhavi Mehta, an analyst at Mumbai-based Kotak Commodity Services Ltd, said by e-mail.
"Market players will now remain unconvinced about the Fed's rate hike unless the US economy shows strength."
The Federal Open Market Committee, which raised rates in December for the first time in almost a decade, next meets on April 26-27.
The greenback weakened versus most of its major peers as traders see only a 10 per cent probability of a US rate hike in April with the odds at less than half for a move in June.
Investors continued to add to holdings in exchange-traded funds backed by gold. Assets rose 0.2 per cent to 1,766 metric tons on Monday, the highest since March 2014, according to data compiled by Bloomberg.
Bullion of 99.99 per cent purity added 0.3 per cent to 260.52 yuan a gram (US$1,248.86 an ounce) on the Shanghai Gold Exchange.
Spot silver rose 0.4 per cent, palladium slipped 0.3 per cent and platinum lost 0.2 per cent.