(Reuters) – Gold rose on Friday, heading for its best weekly performance since late October after the Federal Reserve signaled its ultra-loose monetary policy would continue, keeping the dollar under pressure and the opportunity cost of holding bullion low.
Silver and platinum prices were also on course for their best monthly performances in nine months and nearly four years respectively in January, tracking gains in gold, stocks and other commodities.
Spot gold was up 0.5 percent at $1,727.81 an ounce at 1500 GMT and has risen 10 percent this month, recouping December’s hefty losses. It is up 4.2 percent this week alone, its biggest one-week gain since the week ending October 30.
The metal surged to a seven-week high just below $1,730 an ounce on Thursday after the Fed said it planned to keep interest rates on hold until at least 2014 and signaled it would be ready to take further measures to stimulate the economy.
“The Fed’s announcement that it would keep its rates exceptionally low until 2014 was… clearly not fully priced by the market,” said BNP Paribas analyst Anne-Laure Tremblay. “Real interest rates are likely to stay negative in the U.S. in the next two years, which will be supportive of the gold price.”