Gold futures rose, rebounding from the lowest price in a week on speculation that the Federal Reserve will keep borrowing costs low for an extended period, weakening the dollar and boosting the appeal of the metal. The dollar was little changed after falling 0.4 percent yesterday following the Fed’s decision to keep the main interest rate between zero and 0.25 percent, where it has been since December 2008. The central bank’s policy makers said financial conditions have become “less supportive” of growth. Gold is up 13 percent this year, heading for a 10th straight annual gain. “The Fed doesn’t have a lot of bullets left in terms of resources to add stimulus to the economy through monetary policy,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “The amount of liquidity sloshing around the system will underpin the gold rally.” Gold futures for delivery in August rose $2.20, or 0.2 percent, to $1,237 an ounce at 10:24 a.m. on the Comex in New York. Earlier, the price fell to $1,228, the lowest level since June 15. Before today, the metal gained 34 percent in the past 12 months, touching a record $1,266.50 on June 21, partly on demand for a haven from Europe’s sovereign-debt woes. The metal climbed to records in euros, sterling and Swiss francs this month. Gold historically has moved inversely to the dollar. The Fed’s outlook for the economy and inflation may dampen demand for raw materials and hurt gold prices in the short-term, analysts said. “The Fed is more worried about deflation now,” McGhee said. Some investors buy gold to hedge against accelerating prices. “Owning gold is a bit more problematic than it was when inflationary concerns were higher,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. Silver futures for July delivery rose 2.1 cents, or 0.1 percent, to $18.525 an ounce on the Comex. Platinum futures for October delivery fell $16.30, or 1 percent, to $1,558.40 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery dropped $6.20, or 1.3 percent, to $468.15 an ounce. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net

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