Investing.com - Bullish sentiment in gold held prices near the $1,400 psychological level on Friday in a continuation of the Federal Reserve-driven rally that has taken prices up 4% this week.
Spot gold rose $10.02, or 0.7%, to $1,398.43 by 11:43 AM ET (13:43 GMT), paring gains after topping $1,400 overnight at its most expensive level since September 2013.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange, gained $5.25, or 0.7%, at $1,402.15 a troy ounce, also pulling back from its highest level since July 2014.
Gold has been on a tear this week, with spot and futures both up around 4%, after the Federal Reserve signaled a change in the outlook, bolstering market expectations of up to three rate cuts this year and sending the dollar 1% lower.
“Dovish comments from the Fed and market uncertainty continues to support the prevailing bullish sentiment,” strategists at ING said in a note.
“The rally in gold has seen the gold/silver price ratio increase to 90.8 this week, levels last seen back in 1993. Given broader macro concerns, there is more concern over the demand outlook for silver, given its heavier industrial use,” they added.
St. Louis Fed President James Bullard, who voted against the decision to hold on rates, said on Friday that he dissented because weak inflation and uncertainties surrounding the economic outlook convinced him it was already time to cut rates.
Fed funds futures place the probability of a rate cut at the next meeting in July at 100%.
Fed Vice Chairman Richard Clarida expressed a different view that Bullard, stressing that he expects the U.S. economic expansion to continue.
“The economy's baseline outlook is good: sustained growth, a strong labor market and inflation near our objective,” Clarida said in an interview on Bloomberg Television aired on Friday.
He did indicate however that “there was broad agreement around the table that the case for providing more accommodation has increased” and emphasized that the U.S. central bank had the tools necessary to sustain the expansion “as appropriate”.
A string of other Fed officials including Fed Governor Lael Brainard, Cleveland Fed chief Loretta Mester and San Francisco Fed President Mary Daly will make appearances later on Friday.
In other metals trading, silver futures lost 0.8% at $15.363 a troy ounce by 11:48 AM ET (13:48 GMT).
Palladium futures traded up 1.5% at $1,502.35 an ounce, while sister metal platinum fell 0.5% at $802.00.
In base metals, copper dipped 0.3% to $2.704 a pound.