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Gold rose to the highest level in almost three weeks as the dollar fell to trade near a nine-month low on the Federal Reserve’s cautious interest-rate outlook.

Bullion for immediate delivery advanced as much as 0.9 percent to $1,252.22 an ounce, the highest level since March 22, and was at $1,250.03 at 11:59 a.m. in Singapore. The metal climbed 1.5 percent last week, the most since the period to March 4, according to Bloomberg generic pricing.

Gold’s gains follow its best quarterly rally in three decades as investors sought out bullion as a store of value amid weakness in equities and reduced bets that the Fed will boost interest rates this year. The Bloomberg Dollar Index, which tracks the currency against major peers, fell 0.1 percent to trade near the lowest level since June.

“The dollar’s weakness is supporting gold,” Gnanasekar Thiagarajan, director of Mumbai-based Commtrendz Risk Management Services Ltd., said by phone. “The trend is strong for gold because it failed to go below the $1,200 mark” despite strong U.S. jobs data for March, he said.

RBC Capital Markets raised its average gold-price forecast for this year by 9 percent on the Fed’s more dovish posture and rising demand, according to a report received on Monday.

Odds that policy makers will move in December have dropped to 49 percent from 58 percent at the beginning of last week, based on Fed-fund futures data.

Holdings in exchange-traded funds backed by gold fell 0.7 metric tons to 1,763.6 tons Friday, according to data compiled by Bloomberg.

"Markets are still jittery about what’s going on in the global economy... and gold is the preferred safe-haven," said OCBC Bank analyst Barnabas Gan.

Gold would remain elevated in the short term, Mr Gan said, but he expected the metal to give back some of its gains later in the year as the Federal Reserve carried out two rate hikes.

Reference: Bloomberg, Reuters