* The dollar is heading for the worst week of the month
* Interactive graph tracking global spread of coronavirus: opened in external browser (add comment, update prices) By Diptendu Lahiri Aug 28 (Reuters) – Gold rose 1% on Friday, on track for its first weekly gain in three, as the dollar retreated and the US Federal Reserve’s stance raised expectations of a prolonged low interest rate environment. Spot gold was up 1.6% to $ 1,958.88 an ounce at 9:41 am GMT, gaining nearly 1% so far this week. US gold futures rose 1.8% to $ 1,967.40. Fed Chairman Jerome Powell said on Thursday that the central bank would adopt an average inflation target – which means rates are expected to stay low even if inflation increases a bit in the future. The dollar index fell 0.7% en route to its worst week of the month, making gold cheaper for investors holding other currencies. Besides the dollar, “the political uncertainty around the resignation of the Japanese Prime Minister also supports gold to some extent,” said Peter Fertig, analyst at Quantitative Commodity Research. The Fed’s stance drew a mixed reaction in global equities, while Prime Minister Shinzo Abe’s resignation on health grounds weighed on Japanese markets. Silver, meanwhile, gained 1.7% to $ 27.51 an ounce, on track for a second consecutive weekly rise, up 3.2%. “Lower interest rates for longer, a weaker dollar, massive stimulus measures and increased demand for inflation hedges are expected to continue to drive demand for both metals,” the Saxo analyst said. Bank, Ole Hansen. Weaker hopes for a rapid economic recovery amid the COVID-19 pandemic have forced central banks to adopt accommodative monetary policy, helping gold gain 28% this year as lower interest rates decreases the opportunity cost of holding unproductive bullion. “The only event we are looking at is the US election. If (Donald) Trump loses and refuses to accept the results to stay in the White House until January, it will be very positive for gold, ”added QCR’s Fertig. Platinum rose 0.2% to $ 930.46 an ounce, while palladium climbed 0.3% to $ 2,167.23.
(Reporting by Diptendu Lahiri and Brijesh Patel in Bengaluru; editing by Kirsten Donovan) 5832, outside the US +91 8067493865; Reuters messaging: [email protected]))
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