New York - Gold traded near the highest in a week as Goldman Sachs Group said there’s a chance US policy makers will delay raising interest rates well into next year.
Traders have pushed back their expectations of when the Federal Reserve will start tightening as a report last week showed U.S. payrolls grew less than economists had forecast. There’s a 35 percent probability that borrowing costs will rise by December, down from a 58 percent likelihood seen a month ago, according to futures data compiled by Bloomberg.
Higher rates curb the appeal of bullion, which doesn’t pay interest or give returns like other assets such as bonds and equities. While Goldman Sachs’s central forecast is still for a December liftoff, a slowdown in output and employment may justify the Fed keeping rates near zero for “much longer,” the bank said in a report. The central bank on Thursday will release minutes from its latest meeting.
“Investors are likely to look for guidance for the directions in short-term gold price movements in the Federal Open Market Committee minutes,” Vyanne Lai, an economist at National Australia Bank in Melbourne, said by e-mail.
Gold price
Gold for immediate delivery added 0.2 percent to $1 137.75 an ounce by 11:15 a.m. in London, according to Bloomberg generic pricing. Prices reached a one-week high of $1 142.07 on Monday. The metal is down 3.9 percent this year.
Mohamed A. El-Erian, a Bloomberg View columnist and the chief economic adviser at Allianz, said that the odds of a Fed liftoff at its December meeting are 50 percent, while analysts at Societe Generale said the Fed won’t move until March.
Investors have been buying through gold-backed funds in the past two weeks. Holdings rose 0.5 metric ton to 1,531.8 tons as of Monday, near the highest level since July, data compiled by Bloomberg show.
Silver gained for a fourth day, adding 0.2 percent to $15.6828 an ounce and trading near the highest since mid-July. Palladium rose 0.4 percent to $695.40 an ounce and platinum advanced 0.8 percent to $921.75 an ounce.
BLOOMBERG