NEW YORK (Reuters) - Gold prices have advanced and were poised for a weekly gain, as bullion drew support from the U.S. Federal Reserve’s decision to not rush to raise interest rates.
Spot gold was up at $1,818 per ounce, , and set to mark its second weekly climb.
The Fed said it will begin paring its monthly bond purchases with plans to end them in 2022, but stuck to its long-held view that high inflation would prove “transitory” and likely not require a fast rise in interest rates, prompting investors to call it a “dovish taper.”
Gold, which pays no interest, tends to benefit when interest rates are low as it reduces the opportunity cost of holding bullion.
Adding to gold’s support, benchmark U.S. 10-year Treasury yields pulled back from a one-week peak.
The Bank of England kept interest rates on hold on Thursday, wrong-footing investors who had been convinced that it would be the first of the world’s big central banks to raise borrowing costs after the COVID-19 pandemic.
The European Central Bank (ECB) is aware of people’s fears about high inflation but is very unlikely to raise interest rates next year, ECB board member Isabel Schnabel said on Thursday.
The number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly 20 months last week, suggesting the economy was regaining momentum.
Japan’s household spending fell in September, heightening the risk that the world’s third-largest economy contracted last quarter.
Spot silver rose 0.3% to $23.83 per ounce. Platinum gained 0.2% to $1,028.00, while palladium climbed 0.4% to $2,008.48.