Gold Crosses $1,300 Threshold after Three years in the Dumps

· Dollar Falls, Japan Holds Back on Stimulus

After three years of being scorned, gold is making a powerful comeback. Prices briefly pushed above $1,300 an ounce on speculation that the U.S. central bank will be slow to tighten policy further, bolstering the metal’s appeal as the dollar sagged.

Investors piled back into bullion in 2016 after prices sank for three straight years as risks to the global economy prompted the Federal Reserve to signal it will take a slower approach to rate increases. While the metal’s appeal has also been boosted by the spread of negative interest rates in Europe and Japan, gold’s latest push higher came after the Bank of Japan refrained from adding stimulus last week, which hurt the dollar. The spike above $1,300 on Monday came as many financial markets in Asia and Europe were closed.

Investors have poured funds into bullion-backed exchange-traded products, reversing a tide that saw assets shrink for three years. Holdings rose 1.2 percent to 1,780.7 tons on Monday, the biggest increase since February.

Some forecasters have said the rally may last a while longer. Gold may rise to as much as $1,400, BNP Paribas SA said last month.

The likelihood of higher U.S. rates by year-end is 59.8 percent, down from 93.3 percent in January, futures data show. The future so-called new normal for interest rates might be lower than the Fed’s median estimate, San Francisco Federal Reserve President John Williams said at a conference on Monday.

The U.S. expanded just 0.5 percent in the first quarter, the slowest pace in two years. This week, the release of monthly employment figures will provide clues on the strength of the world’s biggest economy and help shape the outlook for U.S. monetary policy.