April 28, 2016 / 9:51 AM / 2 years ago

PRECIOUS-Gold climbs after Fed, BOJ stand pat on policy

* Fed in no rush to lift rates, BOJ keeps policy steady

* Dollar falls nearly 3 pct vs yen after decision

* Analysts see gold bottoming out after 3-year slide: poll

* Platinum at 9-1/2-month high, palladium at 5-1/2-mth top

* GRAPHIC-2016 asset returns: reut.rs/1WAiOSC (Adds comment, byline, NEW YORK dateline; updates prices)

By Marcy Nicholson and Jan Harvey

NEW YORK/LONDON, April 28 (Reuters) - Gold rose more than 1 percent on Thursday as the Bank of Japan held off from expanding monetary stimulus, boosting the yen versus the U.S. dollar, and after the Federal Reserve signaled it was in no rush to tighten monetary policy.

The Fed left interest rates unchanged after its latest meeting on Wednesday and, while keeping the door open to a hike in June, showed little sign it was in a hurry to tighten policy amid an apparent slowdown in the U.S. economy.

Spot gold was up 1.6 percent at $1,266.50 an ounce at 2:43 p.m. EDT (1843 GMT), a one-week high, while U.S. gold futures for May delivery settled up 1.3 percent at $1,265.50 an ounce.

“The Fed in the end was dovish when a slightly more hawkish message was expected, so that was supportive for gold, while the Bank of Japan clearly wrong-footed the market,” Societe Generale analyst Robin Bhar said.

German bond yields fell as relief spread across markets that the Fed had not strongly signaled that it would raise interest rates in June, while the dollar slid against a basket of currencies.

The U.S. currency came under further pressure after the Bank of Japan defied market expectations for more monetary stimulus, boosting the yen.

U.S. short-term interest rate futures reflect the expectation the Fed will wait until September before raising rates.

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 floor, with rising prices seen this year and next as concerns over the pace of U.S. monetary policy tightening fade.

RBC Capital Markets, however, said on Thursday “the lack of physical follow-through is a fundamental reason for why we think sustained gold bulls will be disappointed by year-end. Absent a large and unforeseen risk-off move driving gold higher, we think that prices likely have already peaked this year.”

Silver was up 2 percent at $17.56 an ounce.

“Despite the gold-silver ratio having fallen to 72, silver remains a compelling buy at these levels and will likely continue to be the surprise outperformer in 2016,” said Mark O‘Byrne, research director of bullion dealer GoldCore in Dublin.

Spot platinum was up 2.5 percent at $1,044.90 an ounce, after rising to the highest since July at $1,049.93 an ounce. Palladium was up 2.4 at $621.75 an ounce, after reaching $626.29, the highest since November.

Additional reporting by A. Ananthalakshmi in Singapore; Editing by Ruth Pitchford and Meredith Mazzilli

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