Investing.com - Gold prices gained in Asia on Wednesday with markets in China, Taiwan and South Korea shut for holidays and caution ahead of remarks later in the day from the U.S. central bank chief.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose 0.25% to $1,277.82 a troy ounce. Gold found some support on physical demand from India as the festival season in the country typically sees increased demand for the precious metal.
Overnight, gold prices halted their recent slump after treasury yields trimmed gains pressuring the dollar to retreat from six-week highs lifting sentiment on the yellow metal.
Gold prices were restricted to a narrow $7 trading range hovering above seven-week lows amid dollar weakness as investors awaited direction from top-tier economic data and a speech from Fed chair Yellen later in the week.
Yellen will speak at the Community Banking in the 21st Century Conference on Wednesday amid growing speculation concerning her position as Fed chair. Fed Governor Jerome Powell and former Fed governor Kevin Warsh are reportedly on a shortlist of candidates to succeed Janet Yellen.
“With the chatter over [President Donald] Trump’s choice for Fed chair starting to dominate, gold really is all about the greenback right now,” said Adrian Ash, head of research at BullionVault.
Gold prices have fallen for three-straight weeks and show no sign of abating as data on Friday suggested that traders are losing faith in gold’s upside potential in the wake of renewed tax reform hopes and an expected year-end rate hike.
Net bullish bets on gold fell to 212,600, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.
Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding non-yielding assets such as bullion.