Gold futures gained for a third day after the Federal Reserve, seeking to bolster the economy, pledged to keep its benchmark interest rate at a record low through at least mid-2013, boosting demand for the metal as a haven investment. Gold for December delivery climbed as much as 1.6 percent to $1,770 an ounce on the Comex in New York and was at $1,763.70 as of 4:21 p.m. Singapore time. The metal for immediate delivery gained 1.2 percent to $1,760.88 an ounce. Futures added as much as 4.1 percent yesterday to a record $1,782.50 an ounce. They have surged 24 percent this year, heading for an 11th year of gains, as the sovereign-debt crisis and a faltering economy boost demand for protection of wealth. Prices were also supported following bond buybacks by the U.S. central bank during two rounds of so-called quantitative easing, combined with the lowest borrowing costs ever. “Rising interest rates tend to detract from gold as investors looking for yields will look elsewhere,” Darren Heathcote, head of trading at Investec Bank (Australia) Ltd., said by phone from Sydney. “As long as rates stay low, particularly U.S. dollar, it will help to support gold, if not push it higher in due course.” Quantitative Easing The dollar strengthened against the majority of its major counterparts today as the Fed’s pledge for record low rates failed to convince investors that global growth will be sustained. Still, it dropped for a fourth day against the yen, declining to 76.71 yen from 76.96 in New York yesterday, when it fell as much as 1.4 percent against the Japanese currency. In pledging to keep borrowing costs at all-time low, the Fed also discussed a range of policy tools to boost the economy, saying it is prepared to use them “as appropriate.” That fueled speculation the central bank may consider a third round of quantitative easing through bond purchases to revive a recovery that’s “considerably slower” than anticipated. “Ultimately gold is bought for that fact that it’s a safe haven,” Heathcote said. “If quantitative easing is seen as being supportive of the markets and helping, particularly the U.S. economy, to recover, you could argue that it shouldn’t be supportive of gold.” Bank of America Merrill Lynch raised its 12-month gold price target to $2,000 an ounce on the increased chance of further quantitative easing, it said in a report dated yesterday. Haven Demand Gold reached a record after Standard & Poor’s cut the U.S. credit rating by one level from the top AAA grade on Aug. 5. The S&P announcement spurred a rout in global equities and stoked concern that the U.S. may lapse into another recession. “The overall problems in the U.S. are far from over and the appetite for haven assets like gold is very strong,” said Viral Shah, vice president at Geojit Comtrade Ltd. in Mumbai. Investors “want to opt out from the other asset classes and that is always going to be to the benefit of gold,” he said. Holdings in exchange-traded products backed by gold dropped 0.5 percent yesterday to 2,206.78 metric tons, ending 11 straight days of gains, according to data compiled by Bloomberg, down from a record 2,216.8 tons on Aug. 8. The U.S. Mint’s American Eagle gold-coin sales reached 39,000 ounces so far in August, according to figures on the Mint’s website, heading for the best month since January, when the total was 133,500 ounces. Silver for immediate delivery added 2.1 percent to $38.3450 an ounce. The September-delivery contract climbed 1.2 percent to 38.335 per ounce. The gold-silver ratio reached 45.57 today, meaning an ounce of gold buys 45.57 ounces of silver, according to Bloomberg data. That compares with a low of 31.71 on April 28. Spot palladium advanced 0.8 percent to $746.75 an ounce and platinum gained 0.2 percent to $1,757 an ounce. To contact the reporters for this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net; Madelene Pearson in Mumbai at mpearson1@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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