Gold futures inched higher Friday, extending gains a day after settling at their highest in nearly seven months as investors cheered the Federal Reserve’s latest bond-purchase plan.
Gold for December delivery rose $3.30, or 0.2%, to $1,775.50 U.S. an ounce on the Comex division of the New York Mercantile Exchange on Friday.
The benchmark gold contract surged $38.40 in regular trading in New York on Thursday, settling at $1.772.10 U.S. an ounce, its highest close since late February.
On the week, gold has gained more than 5%.
Gold’s breakout started to take shape as traders staked out positions in hopes for the Fed’s stimulus announcement, news that could both weaken the U.S. dollar and stoke inflation expectations.
Gold is viewed as a safe store of value and also benefits from fears of currency debasement.
The Fed said Thursday that it would buy $40 billion U.S. of mortgage-backed securities each month until it starts to see the labor market pick up. The U.S. central bank also extended an existing program in which it buys long-dated securities and sells short-dated ones, and extended guidance for ultralow interest rates out to 2015.
The Fed’s commitment to open-ended asset purchases was particularly supportive for gold, metal-sector analysts said.
The dollar extended losses on Friday, providing an extra boost to gold. The ICE dollar index , which compares the U.S. unit to a basket of six currencies, stood lately at 78.722, down from 79.254 late Thursday.
Uncertainty about the path of U.S. fiscal policy, along with rising geopolitical tensions in the Middle East following attacks on U.S. embassies and consulates, served to boost demand for gold as well, the analysts at HSBC said.
Also Friday, copper for December delivery rose 12 cents, or 3.3%, to $3.83 U.S. a pound.
Silver futures for December delivery traded lower, however, down 15 cents, or 0.4%, to $34.63 U.S. an ounce.
Amid concerns about ongoing labour strikes in South Africa, platinum for October delivery jumped $26.50, or 1.6%, to $1,706 U.S. an ounce. December palladium also rose, up $11.70, or 1.7%, to $701 U.S. an ounce.
