Gold rises above US$1,300 an ounce after US Federal Reserve flags slower interest rate rises

Gold necklaces inside a jewellery store in Hong Kong.
Gold necklaces inside a jewellery store in Hong Kong.PHOTO: BLOOMBERG

SINGAPORE (Bloomberg) - Gold climbed above US$1,300 to the highest level in six weeks after the Federal Reserve scaled back the outlook for interest-rate increases and Chair Janet Yellen signaled that secular and more lasting forces may keep rates lower for longer. Silver jumped to the highest since early May.

Bullion for immediate delivery advanced 0.7 percent to US$1,300.66 an ounce before trading at US$1,297.45 by 9:48 a.m. Singapore time, according to Bloomberg generic pricing. Prices have surged 22 percent this year as increasing global economic and political risk drives investors in search of havens. Silver added 1.2 percent.

Yellen pointed to slow productivity growth and aging societies in the U.S. and throughout much of the world among the more permanent forces that could depress rates for longer. The Fed held policy steady at its meeting Wednesday and officials reduced expectations for increases in borrowing costs through 2018. Adding to demand for bullion is investor anxiety over a British vote on June 23 on whether to leave the European Union.