Precious, gold reached two-month highs as central banks strike a dovish tone – News Couple

Precious, gold reached two-month highs as central banks strike a dovish tone

(Resend, price updates)

* Best week for golden eyes in over two months

* Platinum, palladium on the way to a weekly rise

* Lower Returns Complementing Gains – Analyst

(Reuters) – Gold rose more than 1% on Friday to a nearly two-month high as central banks’ dovish tone on interest rates this week increased demand for the safe-haven metal.

Spot gold was up 1.2% at $1,813.36 an ounce by 01:45 PM ET (1745 GMT), recovering from a 0.3% decline triggered by data showing more-than-expected U.S. employment in October.

US gold futures for December delivery settled up 1.3% at $1,816.80 an ounce.

Limited reaction to the data shows “Despite the strong labor market report, it will not change what Federal Reserve Chairman Jerome Powell indicated this week,” said Edward Moya, senior market analyst at OANDA brokerage.

The Federal Reserve on Wednesday stuck to its view that inflation would be “temporary” and likely not require a rapid rise in interest rates. After that, the Bank of England surprised the markets by keeping interest rates on hold.

Near-zero interest rates to stimulate economic growth during the COVID-19 pandemic have pushed gold prices to new highs over the past two years, as easy monetary policy lowers the opportunity cost of holding non-yielding assets.

This week, central bank comments helped gold reverse its early losses and be on track for its best weekly gain since late August at around 1.8%.

“Gold bulls seem to be drawing strength from the Fed’s no-hurry stance on raising interest rates,” said FXTM analyst Lucman Otunuga, adding that weak Treasury yields were also supporting the gains.

US 10-year Treasury yields fell to their lowest level in nearly a month.

Actual demand for gold in India, the world’s second largest consumer, jumped this week as buyers took advantage of a slight drop in prices and bought into the precious metal during the festival season.

Spot silver prices rose 1.2% to $24.05 an ounce. Platinum rose 0.7% to $1032.71 an ounce and palladium rose 1.3% to $2,025.32 an ounce, both on track for weekly gains.

Additional reporting by Bharat Govind Gautam and Amy Karen Daniel in Bengaluru; Additional reporting by Brigish Patel; Editing by Shalish Cooper, Louise Heavens and Aditya Soni

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