Gold prices rise

GOLD prices rose to their highest in two weeks yesterday amid a muted dollar, after minutes from the Federal Reserve’s latest policy meeting showed the US central bank was concerned over low inflation.

Spot gold was up 0,2 percent at $1,294.56 an ounce by 0657 GMT, after earlier marking its best since September 27 at $1 296,43. US gold futures for December delivery climbed 0,6 percent to $1 297,20 per ounce.

“Gold prices rose slightly as the market appeared to take the Fed minutes as slightly dovish. In particular, it was the comments on persistently low inflation that seemed to gain much attention. This saw the US dollar weaken slightly, increasing investor appetite for the precious metal,” ANZ analysts said in a note.

Fed policymakers had a prolonged debate about the prospects of a pickup in inflation and slowing the path of future interest rate rises if it did not, minutes from the US central bank’s last policy meeting on September 19-20 released on Wednesday showed.

The dollar hit its lowest in over two-weeks against a basket of currencies yesterday following the news. Several policymakers said they would focus on upcoming inflation data over the next few months when deciding on the central bank’s future rate hike path. US short-term interest rate futures were steady on Wednesday as traders stuck to their bets on a possible rate hike in December.

“Although it seems likely that the FOMC will increase rates in December, the upcoming US inflation data will be closely watched . . . with softer than expected data expected to provide bullion with impetus for a sustained push back above $1 300,” MKS PAMP trader Sam Laughlin said in a note.