Gold rose for a third straight session on Wednesday, helped by a weaker dollar and on expectations the Federal Reserve will maintain its accommodative policy to support the US economy through the coronavirus crisis.
Spot gold was up 0.2 per cent to $1,717.97 per ounce at 0928 GMT, having jumped more than 1 per cent in the last session. US gold futures gained 0.2 per cent to $1,725.30.
“While you can be optimistic about the fact that the US economy did add some jobs, that doesn’t necessarily mean the crisis is over,” said Michael Hewson, chief market analyst at CMC Markets UK.
The Fed was likely to remain fairly easy for quite sometime and the economic outlook was likely to remain cloudy, Hewson said, adding that a weaker dollar was helping prices.
The dollar fell to a near three-month low against key rivals ahead of the outcome of Fed’s monetary policy meeting at 1800 GMT.
The US central bankers will be publishing their first economic projections since the pandemic set off a recession in February.
“Gold traders would be looking to clues from the Fed as to the reality of a V-shaped economic recovery or whether stock market investors have gone ahead of themselves in assuming a V-shaped recovery,” Phillip Futures said in a note.
Easy monetary policy tends to benefit non-yielding gold and weighs on dollar and Treasury yields. Gold is also seen as a safe-haven during economic uncertainties.
The global economy will suffer the biggest peace-time downturn in a century, the OECD said on Wednesday.
Goldman Sachs expects gold to reach $1,800 per ounce on a 12-month basis and the tail risk of above-target inflation as a potential driver for prices to climb beyond $2,000.
Elsewhere, silver gained 0.2 per cent to $17.63 an ounce, palladium climbed 0.4 per cent to $1,948.72, while platinum fell 0.5 per cent to $832.81.