Gold held recent gains to trade near a two-week high on Friday and was headed for its biggest weekly jump since January, after the Federal Reserve cautioned over its rate hike path and U.S. economic growth.
Spot gold was steady at $1,171.20 an ounce by 0730 GMT, near a two-week high of $1,177.46 hit on Thursday. The metal is up about 1 percent for the week – its biggest weekly gain since late January.
Gold had dipped to a four-month low earlier this week as concerns mounted over higher U.S. interest rates which could dent demand for non-interest bearing bullion.
The Fed, however, sounded a cautious note on the health of the economic recovery after its two-day policy meet this week, and slashed its median estimate for the federal funds rate and expressed concern over the strength in the dollar.
“Gold (is) still getting traction from dovishly perceived FOMC statement, short-covering and fresh purchases,” said HSBC analyst James Steel, referring to the Federal Open Market Committee.