NEW YORK: Gold prices held firm near a two-week high on Friday, heading for their biggest weekly gains in more than two months after the US Federal Reserve cemented investors hopes that interest rates are going to stay low for some time.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Spot gold was steady at $1,827.68 per ounce by 1154 GMT, after hitting its highest since July 15 at $1,832.40 on Thursday. It is up 1.4% so far for this week.

US gold futures eased 0.3% to $1,831.10.

“The Fed’s accommodative stance this week is sinking the dollar and Treasury yields are relatively low. There is a bit of fluctuation but overall these factors have been quite supportive for gold,” said Xiao Fu, head of commodity market strategy at Bank of China International.

Fed Chair Jerome Powell on Wednesday said the US job market still had some ground to cover before it would be time to pull back support and that it was “ways away” from considering interest rate hikes.

Meanwhile, data showed the US economy expanded at a 6.5% annualised rate in the second quarter, but growth fell short of economists’ expectations.

Dovish remarks by the US central bank and underwhelming economic data pushed the dollar to a one-month low and on track for its biggest down week since May, making gold more appealing for other currency holders.