Gold futures jumped the most in 14 weeks as the Federal Reserve said U.S. interest rates will remain low, driving the dollar lower and boosting demand for the precious metal as an alternative investment.
According to Bloomberg, the greenback fell to a four-week low against a basket of 10 major currencies. Yesterday, Fed Chair Janet Yellen said rates will probably remain low for a considerable time after debt purchases by the central bank end. In 2013, gold ended a 12-year rally on expectations that the Feb would taper monetary stimulus following gains in the labor market.
“Some people are buying gold since Yellen made it clear that the low-interest rate regime is here to stay,” Tommy Capalbo, a broker at Newedge Group in New York, said in a telephone interview. “The dollar’s weakness is also supportive.”
Gold futures for August delivery rose 1.7 percent to $1,294.60 an ounce at 10:05 a.m. on the Comex in New York, A close at that price would mark the biggest gain for a most-active contract since March 12. Earlier, the metal reached $1,295.90, the highest since May 23.