Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold jumps to session highs as Yellen signals gradual rate hikes ahead

Published 07/12/2017, 09:09 AM
Updated 07/12/2017, 09:09 AM
© Reuters.  Gold jumps to session highs after Yellen comments

© Reuters. Gold jumps to session highs after Yellen comments

Investing.com - Gold prices rose to the highest levels of the session in North American trade on Wednesday, as traders digested prepared remarks from Federal Reserve Chair Janet Yellen.

Comex gold futures were at $1,223.24 a troy ounce by 9:05AM ET (1305GMT), up $8.90, or around 0.7%, after touching a session peak of $1,224.93. Prices settled with a modest gain for a second-straight session on Tuesday.

In prepared remarks released before her testimony to the House Financial Services committee, Yellen said the Fed remains on track to both raise interest rates and begin shrinking its balance sheet before the end of the year, despite low inflation.

She added that the rate increases and balance sheet reduction would be gradual.

The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has since raised doubts over whether the U.S. central bank will be able to stick to its planned tightening path.

Futures traders are pricing in around a 40% chance of a hike by the end of the year, according to Investing.com’s Fed Rate Monitor Tool.

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

The dollar index, which tracks the greenback against six major rivals, hit the lowest level of the day following the release of Yellen's comments, trading down 0.2% at 95.33, not far from the nine-month low of 95.22 plumbed in late June.

Besides the Fed, investors will be keeping a close eye on Washington, for any more political noise coming out of the White House as the Russia-linked scandal continues to rumble on.

Donald Trump Jr. released an email chain on Tuesday, which referred to a top Russian government prosecutor as offering the Trump campaign damaging information about Democratic rival Hillary Clinton.

The emails are the most concrete evidence yet that Trump campaign officials welcomed Russian help to win the election, a subject that has cast a cloud over Trump's presidency and spurred investigations by the Justice Department and Congress.

Also on the Comex, silver futures tacked on 16.9 cents, or roughly 1.1%, to $15.91 a troy ounce.

Among other precious metals, platinum was up 2.2% at $918.50, while palladium rose 2.1% to $864.83 an ounce.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.