Gold prices rose to a near three-week high Monday, after a Federal Reserve member said the central bank won't raise interest rates until inflation has returned to normal.
Gold for December delivery, the most actively traded contract, was recently up 0.8% at $1,102.90 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest level since July 23.
Federal Reserve Vice Chairman Stanley Fischer on Monday emphasized that inflation remains subdued and Fed officials must see consumer prices returning to more normal levels before raising interest rates. Mr. Fischer, who spoke on Bloomberg TV, didn't offer a specific prediction for when rates could rise. Low rates for longer is good news for gold, which pays its holders nothing and struggles to compete with yield-bearing investments when borrowing costs rise.
"Traders believe the Fed is giving themselves an excuse for not raising rates in September, and that's a positive for gold," said James Cordier, president at Optionsellers.com.