Gold and silver futures rose to the highest since February as the dollar’s decline boosted demand for the precious metals as alternative investments.
The greenback slumped against a basket of 10 currencies to the lowest since January after a government report showed Wednesday that U.S. retail sales stalled in April, damping prospects for an increase in interest rates by the Federal Reserve. On Thursday, gold climbed for the third straight day, the longest rally in seven weeks.
Higher rates curb gold’s appeal because the metal generally offers returns only through price gains, while a weaker dollar can increase demand for the metal as a store of value. U.S. economic indicators have missed expectations since January, according to an index compiled by Citigroup Inc., suggesting policy makers aren’t close to raising their benchmark.
On the Comex in New York, gold futures for June delivery rose 0.6 percent to $1,225.70 an ounce at 10:17 a.m. Earlier, the price reached $1,227.70, the highest for a most-active contract since Feb. 17. The metal topped the 200-day moving average for the first time since February.
Most economists in a Bloomberg survey late last month predicted the central bank will start tightening in September, rather than at next month’s meeting. The Fed has held rates near zero since 2008.