April 27 (Bloomberg) -- Gold futures resumed a rally on speculation that the Federal Reserve will be slow to raise U.S. borrowing costs, weakening the dollar and boosting the appeal of the precious metal as an alternative asset. The dollar fell to the lowest since August 2008 against a currency basket before a press conference with Federal Reserve Chairman Ben S. Bernanke. The Fed has kept its benchmark interest rate at a record low to stimulate the economy, while the European Central Bank this month began raising rates to stem inflation. Yesterday, gold dropped for the first time in two weeks. "There's not a lot the Fed can do to ease the dollar's suffering," said Matthew Zeman, a strategist at Kingsview Financial in Chicago. "The U.S. will be behind in the tightening cycle, and that's a green light to buy gold." Gold futures for June delivery rose $2.90, or 0.2 percent, to $1,506.40 an ounce at 10:49 a.m. on the Comex in New York. On April 25, the price surged to a record $1,519.20. Before today, gold gained 30 percent in the past year as escalating sovereign debt in Europe, accelerating inflation and fighting in Libya fueled demand for an investment haven. Standard & Poor's on April 18 revised the credit outlook for the U.S. to negative from stable. "Sovereign-debt concerns have not abated," David Wilson, an analyst at Societe Generale SA, said in a report. The dollar's drop is "influential" in driving gold up, he said. Fed policy makers will leave the bank's target rate at zero percent to 0.25 percent, according to all economists surveyed by Bloomberg News. The central bank may also say it plans to complete $600 billion in Treasury purchases in June. The Fed is due to release a statement at about 12:30 p.m. in Washington, and Bernanke is set to speak to reporters at 2:15 p.m. Silver futures for July delivery fell 10.4 cents, or 0.2 percent, to $44.975 an ounce. Two days ago, the metal, which has doubled in the past 12 months, reached a 31-year high of $49.845. --With assistance by Maria Kolesnikova in London and Kim Kyoungwha in Singapore. Editors: Patrick McKiernan, Daniel Enoch

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