Gold rose the most in two months as the dollar headed for the biggest drop in almost a year, reviving the metal’s appeal as an alternative investment after prices touched a 2014 low. Silver jumped the most in 15 weeks.
The dollar fell as much as 0.9 percent against a basket of 10 currencies as uneven U.S. labor-market data fuels speculation on when the Federal Reserve will raise interest rates. On Oct. 3, the greenback reached a four-year high as gold slumped below $1,200 for the first time since Dec. 31.
“The dollar drifting lower is adding support to gold,” Ole Hansen, the head of commodity strategy at Saxo Bank in Copenhagen, said in a telephone interview. “Almost all of gold’s weakness we’ve seen has been a strong-dollar move.”
Gold futures for December delivery gained 1.2 percent to settle at $1,207.30 an ounce at 1:45 p.m. on the Comex in New York, the biggest increase since Aug. 6. The price has dropped 7.8 percent in the past 12 months.