Gold advanced above $1,300 an ounce for the first time since January 2015 on speculation central banks in the U.S. to Europe will maintain low interest rates, spurring demand for the metal.
Gold futures for June delivery climbed as much as 1.1 percent to $1,304.30 an ounce on the Comex in New York, the highest level since Jan. 22, 2015, and were at $1,301 at 7:06 a.m. The precious metal has climbed 23 percent this year.
Investors have flooded back to precious metals this year as risks to the global economy prompted the Federal Reserve to signal it will take a slower approach to further interest-rate increases. That has weakened the dollar and added to the appeal of owning non-yielding assets like gold.
“Gold has showed quite an impressive performance.” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by phone. “Given that the interest rates will probably remain low for longer in the U.S., and given that the European Central Banks will probably loosen its monetary policy further, such a high gold price can be justified.”
Fed policy makers last week left benchmark interest rates unchanged. This raises gold’s appeal as the metal generally gives investors returns only through price gains.
Gold for immediate delivery advanced as much as 0.7 percent to $1,302.20 an ounce before trading at $1,298.50 an ounce, according to Bloomberg generic pricing. Futures trading on the Comex was about even with the 100-day average for this time, data compiled by Bloomberg show. Markets in Asia and London were shut for holidays.
The Bloomberg Dollar Spot Index is the weakest since May 2015, boosting the appeal of gold and silver as alternatives. The index fell 0.1 percent Monday.
Silver futures climbed 0.6 percent to $17.92 an ounce. Platinum gained 0.4 percent to $1,082.30 and palladium dropped 0.1 percent to $627.25.