Gold jumped to a seven-week high and silver soared to a 15-month high on Friday, as the dollar remained downbeat after the Bank of Japan surprised markets by standing pat on policy.
The dollar and euro had posted their biggest daily losses against the yen in more than five years on Thursday after the BOJ policy decision.
The yen set an 18-month high against the dollar on Friday, and the greenback fell 0.4 per cent against a basket of major currencies.
Spot gold climbed to as high as $1,280.60 an ounce, its highest since March 11. It pared gains to trade up 0.7 per cent at $1,274.41 by 0341 GMT.
For the week, the metal is up 3.5 per cent in what would be its biggest weekly jump since the week ended Feb 12.
Silver surged 2 per cent to $17.867 an ounce, its highest since January 2015. It was on track for a fourth straight weekly gain.
“The main reason for the rally is that the markets expected BOJ to announce more easing measures and the dollar is continuing to weaken,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
“There are quite a lot of people on the long side. So I think the momentum will continue for both metals,” said Leung.
According to latest data, speculators’ bullish position on COMEX silver contracts was at a record high in the week to April 19, while the bullish position on gold was at a 3-1/2-year peak.
Reuters technical analyst Wang Tao said prices could rise to $1,289.
Fed policy decision
The Federal Reserve’s decision on Wednesday to leave interest rates unchanged also supported bullion. The Fed kept the door open for a rate hike in June while showing little sign it was in a hurry to tighten monetary policy amid an apparent slowdown in the US economy.
Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
After three straight years of losses, analysts are finally prepared to say gold prices have found a bottom, with rising prices seen this year and next as concerns over the pace of US monetary policy tightening fade.
US economic growth
US data on Thursday supported views the Fed will take a cautious stance in hiking rates this year. US economic growth braked sharply in the first quarter to its slowest pace in two years.
Assets in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.19 per cent to 804.14 tonnes on Thursday.