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Gold attempts modest gains as traders look ahead to Yellen speech

Commodities Aug 23, 2016 08:36AM ET
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© Reuters. Gold slightly higher as traders look ahead to Yellen speech

Investing.com - Gold prices were modestly higher in North American trade on Tuesday, moving away from the prior session's two-week low as the U.S. dollar weakened with markets in wait and see mode ahead of a speech by Federal Reserve Chair Janet Yellen later this week that could provide clues about the timing of a U.S interest rate hike.

Gold for December delivery on the Comex division of the New York Mercantile Exchange inched up $3.35, or 0.25%, to trade at $1,346.75 a troy ounce by 8:35AM ET (12:35GMT).

Fed Chair Janet Yellen may provide fresh clues on the timing of the next U.S. rate hike at a speech during an annual meeting of central bankers in Jackson Hole, Wyoming, on Friday. The annual Fed symposium has sometimes been used by Fed chairs to make important policy statements.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 94.30 early Tuesday, pulling back from the prior session's high of 94.94 but still keeping distance from last week's eight-week low of 94.05.

On Monday, the yellow metal dropped to a two-week low of $1,335.40 amid indications the Federal Reserve could raise interest rates as early as next month following hawkish comments from several Fed officials.

According to Investing.com's Fed Rate Monitor Tool, investors are pricing in an 18% chance of a rate hike by September, up from 12% at the start of last week. December odds were at around 50%.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

Gold attempts modest gains as traders look ahead to Yellen speech
 

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