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Gold rises past $1,300 an ounce

Investors see interest rates remaining low longer
In 2016, investors have flooded back to precious metals as risks to the global economy prompted the Fed to signal it will take a slower approach to further interest rate increases, weakening the dollar.

While gold sold off Tuesday, on Monday it advanced above $1,300 an ounce for the first time since January 2015 on speculation central banks from the United States to Europe will maintain low interest rates, spurring demand for the metal.

Federal Reserve policymakers last week left benchmark interest rates unchanged. This raises the shiny metal’s appeal as gold generally gives investors returns only through price gains. The Bloomberg Dollar Spot Index touched the weakest since May 2015.

Investors have flooded back to precious metals this year as risks to the global economy prompted the Fed to signal it will take a slower approach to further interest rate increases, weakening the dollar.

“We believe that there’s a lot of things that are ripe for precious metals right now: a low interest rate environment, interest rate expectations backing down again and we have a weaker dollar,” Chris Gaffney, president of EverBank World Markets in St. Louis, said in a telephone interview. “We believe this is just the start of a push higher for the precious metals.”

On Tuesday, gold futures for June delivery finished at 1287.70 an ounce on the Comex in New York. On Monday, the price rose as much as 1.2 percent to $1,306, the highest since Jan. 22, 2015. The precious metal is the best-performing financial asset in 2016, rising 22 percent for the year.



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