Gold held an advance from a five-year low as Federal Reserve Vice Chairman Stanley Fischer said that U.S. policy makers have done their best to prepare international markets for the first interest rate increase since 2006.
Bullion for immediate delivery was at $1,081.52 an ounce at 8:17 a.m. in Singapore from $1,082.21 on Thursday, when prices gained 1.1 percent as the dollar fell, according to Bloomberg generic pricing. This week, the metal remains 0.2 percent lower after dropping on Wednesday to $1,064.55, the lowest since February 2010.
Bullion investors are zeroing in on when higher U.S. borrowing costs are likely to start rising as the metal doesn’t pay interest. The U.S. central bank, which has held rates near zero since 2008, is contemplating lifting them as the job market heals and officials gain confidence that inflation will accelerate toward the Fed’s 2 percent goal. Policy makers next meet Dec. 15-16.
The likelihood of higher rates by year-end is 68 percent, up from 50 percent at the end of October, futures data show. Fischer said Thursday the Fed has “done everything” it can to avoid surprising markets and governments when it moves.