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Gold soars above US$1,200 as Yellen signals go-slow on rates path
[SINGAPORE] Gold jumped to the highest level in eight months after Federal Reserve Chair Janet Yellen signaled that the US central bank may delay further interest-rate increases should the turmoil in global markets continue.
Bullion for immediate delivery rallied as much as 1.5 per cent to $1,214.64 an ounce, the highest price since May 22, according to Bloomberg generic pricing. The metal traded at $1,209.75 at 8:50 am in Singapore, headed for ninth gain in 10 days.
Gold has surged 14 per cent this year as the turmoil sweeping across financial markets stoked demand for haven assets. Ms Yellen said Wednesday the turbulence had tightened financial conditions by pushing down stock prices, supporting the dollar and raising some borrowing costs. Futures traders, who at the end of last year predicted a more than 50 per cent chance of a rate rise in March, now see less than 30 per cent odds borrowing costs will increase this year.
"Yellen acknowledges that the recent market volatility has tightened the financial conditions in the US," Bernard Aw, a strategist at IG Asia Pte in Singapore, said by phone. Haven demand and a weaker dollar "are the main things pushing up gold prices now," Mr Aw said on Thursday.