Gold Advances As Dollar Eases From High
Gold rose on Wednesday, after Federal Reserve chair Janet Yellen’s testimony to Congress revealed that the central bank believes it would not have to lift rates “all that much” to reach the neutral Fed Funds rate, pointing to a slower pace of future rate hikes.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose by $1.49, or 0.12%, to $1,211.99 a troy ounce.
The Fed "continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time," Yellen said in her prepared testimony.
Yellen noted that the Federal Funds rate "would not have to rise all that much further" to reach a neutral level, suggesting a slowdown in the pace of future rate hikes.
The somewhat dovish statement from Yellen weighed on the dollar and yields, boosting demand for the precious metal.
The dollar traded roughly flat against its rivals while the U.S. 10-Year dipped 1.35% to 2.330.
Gold is sensitive to moves in both bond yields and the U.S. dollar – A lower dollar makes gold cheaper for holders of foreign currency while a fall in U.S. rates, lowers the opportunity cost of holding non-yielding assets such as bullion.
Other precious metals shrugged off negative sentiment to trade higher, as silver futures added 0.88% to $15.560 a troy ounce while platinum futures fell 0.30% to $901.35.
Copper traded at $2.649, up 0.08%, while natural gas, rose by 2.41% to $2.933.
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