Gold rebounded, rising more than 1.5% on Friday, after a day of sharp decline, as the US dollar fell and the Federal Reserve unveiled a policy targeting a low interest rate for a long period.
By today's trading, the spot price of gold was up 1.7% to $1960.72 an ounce, bringing this week's gains to more than 1%.
Prices were down by as much as 2.2% on Thursday after a surge in US Treasury yields following a speech by Fed Chairman Jerome Powell.
Meantime, US gold futures rose 2% to $1971.40 an ounce.
“The significant decline in the US currency has raised gold. The Fed said it could allow inflation to rise above its 2% target for some time. It seems that they will keep their monetary policy in a position of extreme easing, which will support gold," said David Madden, market analyst at CMC Markets.
The dollar fell to its lowest level in more than a week, making gold less expensive for holders of other currencies, and the currency is heading towards its biggest weekly loss in percentage terms since the end of July.
On Thursday, Powell said that the Fed will adopt an average for its inflation target, meaning that interest rates will likely remain low even if inflation rises slightly in the future.
Silver rose 1.8% to $ 27.53 an ounce, heading for second week gains for in a row.
Platinum, however, fell 0.2% to $ 926.49, while palladium advanced 0.5% to $ 2,171.08 an ounce.
The yellow metal prices also continued to rise in Egypt on Friday to jump EGP 6 per gram to increase by about EGP 19 in two days.
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