(Reuters) – Gold prices rose as much as 1% on Thursday as the dollar index widened its slide on progress with U.S. stimulus plans and the Federal Reserve’s commitment to pump more money into the economy and interest rates kept low.
Spot gold rose 0.5% to $ 1,874.14 per ounce at 1030 GMT, after approaching a one-month high of $ 1,882.76 earlier in the session. U.S. gold futures rose 1.1% to $ 1,878.50.
“The Fed’s decision makes it clear that it is still uncertain about economic recovery,” said Talk Products Research analyst Peter Fertig.
“With the attention of the Fed and the position of other central banks, there are signs that inflation will rise in the future and with the dollar index down sharply, gold looks attractive.”
Legislators said Wednesday that U.S. transportation negotiators were “closing in” on a $ 900 billion COVID-19 aid package that was intended to provide $ 600- $ 700 incentive studies to individuals, who the dollar slipped to a more than two-year low.
The Fed has also pledged to maintain its bond-buying policy to secure U.S. economic recovery.
“If the central banks continue to accept the higher inflation rate, it will bring down real rates further, helping to reduce the opportunity cost of holding gold,” said Ravindra Rao, west. -president, products at Kotak Securities.
Investors are now monitoring the Bank of England’s policy decision, to come at 1200 GMT, where it is expected to stop further stimulus.
“Basically, gold is still very strong and if it closes above $ 1,880 an ounce today we may see it go up to $ 1,950 before the year ends,” Rao said.
In other metals, silver rose 1.2% to $ 25.65 an ounce. Platinum gained 1.6% to $ 1,050.83 and palladium rose 0.9% to $ 2,347.65.
Reporting by Diptendu Lahiri in Bengaluru; Edited by Mark Potter