*
Goldman Sachs raises gold price forecasts
*
Treasury yields near September lows
(Updates prices)
By Seher Dareen
March 23 (Reuters) - Gold prices extended gains to a
second straight session on Thursday, boosted by a slide in
Treasury yields after the U.S. Federal Reserve signalled an end
to its monetary tightening cycle might be on the cards.
Spot gold rose 1.2% to $1,993.09 per ounce by 2:59
p.m. ET (1859 GMT), while U.S. gold futures jumped 2.4%
to settle at $1,995.90.
The Fed raised rates by a quarter of a percentage point on
Wednesday, but highlighted that it was on the verge of pausing.
If they truly do pause, that's a green light for the gold
market, with it being a quintessential hedge against inflation,
said David Meger, director of metals trading at High Ridge
Futures, adding that "it's likely that inflation would remain
elevated if they're unable to raise rates any further".
Gold hit a one-year high on Monday, breaching the key $2,000
level on safe-haven demand. However, it later ceded some ground
as banking sector jitters subsided following the rescue of
Credit Suisse.
The outlook still remains positive if the Fed pauses or the
banking crisis carries on, analysts say.
Wall Street bank Goldman Sachs hiked its 12-month gold price
target to $2,050 an ounce from $1,950, describing it as the best
hedge against financial risks.
"A combination of inflation still being at lofty levels,
safe haven alternative investment demand, and the weaker dollar
- all of these are significant driving factors behind gold's
recent move," Meger added.
The dollar spent much of the session near early-February
lows, making gold cheaper for holders of other currencies.
Benchmark U.S. government bond yields eased and improved
zero-yield bullion's allure. In other metals, spot silver dipped 0.3% to $22.95
per ounce and platinum was up 0.3% at $980.67, while
palladium fell 1.6% to $1,427.17.
(Reporting by Seher Dareen in Bengaluru; Additional reporting
by Bharat Govind Gautam; Editing by Christina Fincher and
Shounak Dasgupta)
