Dovish Fed, weaker dollar lifts gold to 1-week high

Platinum was up 1.5 per cent at $962.99 per ounce, close to $968.20, its highest since March 7, hit earlier in the day.

Globally, gold rose by 0.44 per cent to Dollars 1,225.10 an ounce and silver by 0.63 per cent to USD 17.43 an ounce in Singapore.In the national capital, gold of 99.9 and 99.5 per cent purity surged by Rs 450 each to Rs 29,100 and Rs 28,950 per 10 grams respectively.

The dollar held onto modest gains but remained near five-week lows against other major currencies on Friday, after the release of mixed USA data, although the Federal Reserve's dovish stance this week continued to weigh on the greenback.

The Fed raised United States rates on Wednesday, as expected, but its earlier forecast of three rate increases this year remained unchanged, disappointing some investors who had hoped for hints of a possible fourth hike in 2017.

The result, along with the Fed statement, handed the euro its biggest one-day jump in nine months, with the single currency climbing above $1.07 for the first time since early February late on Wednesday and staying above that level, though a touch down on the day, in European trade on Thursday.

"Everything's quieted down today".

The Fed on Wednesday lifted the target overnight interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent, but stuck to its original forecast of three rate increases this year.

"There is momentum as people start to look again how far they can push gold higher", said Georgette Boele at ABN AMRO.

Still, some market strategists see near-term headwinds for precious metals, especially since the bullish sentiment spurred by President Donald Trump's proposals to juice the US economy through fiscal-stimulus measures haven't entirely vanished.

Rate rises lead to higher bond yields, which increase the opportunity cost of holding non-yielding bullion and tend to boost the dollar, in which gold is priced.

Investors were also looking ahead to the Group of 20 finance leaders' meeting in Germany this weekend, where any attempt by the Trump administration to pursue protectionist policies could fuel demand for gold as a safe haven.

Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.53 percent on Wednesday.

Palladium advanced 0.8 percent to $769 per ounce after hitting a week high of $774.70.

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