Gold futures rose for the second straight day amid forecasts that U.S. borrowing costs will hold at a record low and European inflation will pick up gradually.
Expectations that interest rates won’t rise until mid-2015 are appropriate, William Dudley, the president of the Federal Reserve Bank of New York, said today. European Central Bank President Mario Draghi said that the inflation rate will gain in the next 30 months, damping deflation risks. Yesterday, gold climbed after U.S. service industries expanded in February at the slowest pace in four years.
Through yesterday, gold climbed 11 percent this year on demand for a haven amid turmoil in Ukraine and concern that the U.S. is faltering. The Labor Department will release jobs data tomorrow. In 2013, the metal tumbled 28 percent, the most since 1981, as global equities rallied and U.S. inflation was muted.
“Comments from Dudley and Draghi have helped gold find support,” David Lee, a vice president at Heraeus Precious Metals Management in New York, said in a telephone interview. “People will be closely watching tomorrow’s employment numbers to assess the health of the economy.”