New York - Gold futures rose to a two-week high after minutes from the Federal Reserve’s March meeting showed that several officials said projections for an increase in US borrowing costs might be overstated.
“Several participants noted that the increase in the median projection overstated the shift in the projections,” the minutes showed yesterday.
Fed Chair Janet Yellen said last month that the central bank may end debt purchases this year and raise interest rates in 2015.
The US and its economic allies weighed tougher sanctions against Russia if it intervenes militarily against Ukraine.
“Gold’s prospects have been boosted by a more dovish Federal Reserve,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview.
“There is also some safe-haven buying because of Russia.”
On the Comex in New York, gold futures for June delivery climbed 1.1 percent to $1,320.70 an ounce at 11:09 a.m.
Earlier, the price reached $1,324.90, the highest for a most-active contract since March 24.
Through yesterday, gold gained 8.6 percent this year.
The price reached a six-month high on March 17 as turmoil amid turmoil in Ukraine and signs of faltering economic growth in the US
The Fed in March reduced the monthly pace of debt purchases by $10 billion, to $55 billion and signaled more cuts in “further measured steps.”
The overnight bank lending has been zero percent to 0.25 percent since 2008.
Gold jumped 70 percent from December 2008 to June 2011 as the Fed bought debt and cut rates to a record in a bid to boost the US economy.
In 2013, the metal tumbled 28 percent, the most since 1981, amid a US equity rally to a record and muted inflation.
Silver futures for May delivery climbed 2 percent to $20.175 an ounce on the Comex, heading for the biggest gain since March 12.
Platinum futures for July delivery rose 1.4 percent to $1,459.20 an ounce on the New York Mercantile Exchange.
Earlier, the price reached $1,462, the highest since March 19.
Palladium futures for June delivery gained 1.2 percent to $791.15 an ounce, the third straight advance.
Platinum-group metal output in South Africa, the world’s biggest producer, dropped in February by the most in two years after a strike by mine workers. - Bloomberg News