Gold prices up more than 1% on dovish Fed minutes

Gold prices rose more than 1% on Thursday, after the minutes of the Federal Reserve’s March meeting indicated that an interest rates increase is unlikely to be warranted for some time.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery advanced 1.13% to $1,320.60, the highest since March 24.

The Fed’s March meeting minutes released on Wednesday showed that policymakers discussed whether to keep interest rates at record lows until inflation moves higher, and did not elaborate on a possible timeframe for when rates could start to rise.

The minutes also indicated growing concerns among officials over persistently low inflation.

Last month the U.S. central bank reduced the monthly pace of purchases by $10 billion, to $55 billion, and repeated it is likely to continue paring the program in “further measured steps.”

“Members agreed that there was sufficient underlying strength in the broader economy to support ongoing improvement in labor-market conditions,” the minutes said.

Gold strengthened after the minutes, which eased fears over a rate hike.

Gold prices had tumbled from a six-month high in mid-March, after Fed Chair Janet Yellen said that interest rates could start to rise around six months after the end of the Fed's bond purchasing program, suggesting a rate hike could occur in the early part of 2015.

Elsewhere, in metals trading, silver for May delivery jumped 2.42% to $20.248 a troy ounce, while copper for May delivery slipped 0.13% to $3.033 a pound. Investors are viewing the silver price of around $20 a troy ounce level as a good entry point. Silver reached a peak of $49.83 a troy ounce in April 2011.