Gold Ends Higher After Yellen’s Comments

Gold futures moved up for a fifth straight session to end at a near three-month high Tuesday, on cues from the comments made by Federal Reserve Chairman Janet Yellen. The new Fed Chief in her testimony before the House Financial Services Committee said she would continue with the policies of her predecessor Ben Bernanke with the gradual tapering of the monthly bond-buying program, while indicating an overall accommodative policy.
Federal Reserve Chair Janet Yellen on Tuesday praised the policies of predecessor Ben Bernanke, hinting that the central bank will further taper monetary stimulus in the coming months. In her first public remarks since taking over the top job at the Fed, Yellen said it would take a “significant deterioration” in the economic outlook or a risk of deflation to delay its slow exit from bond-buying. The Fed is currently pumping $65 billion a month into markets, down from $85 billion in early December.
In economic news, wholesale inventories in the U.S. rose less than expected in December, with increased inventories of durable goods partly offset by a drop in inventories of non-durable goods, a Commerce Department report showed Tuesday. Meanwhile, U.K.’s leading business group, the Confederation of British Industry, on Tuesday upgraded its growth projection as the economy is set to gain strength from business investment amid low borrowing cost and net trade poised to pick up this year.
Gold for April delivery, the most actively traded contract, jumped $15.10 or 1.2 percent to close at $1,289.80 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.
Gold for April delivery scaled an intraday high of $1,294.40 and a low of $1,273.50 an ounce.
Yesterday, gold ended at a 2-1/2-month high even as China returned from a long New Year holiday, while investors awaited Federal Reserve Chief Janet Yellen’s testimony before the the House Financial Services Committee. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged at 797.05 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.61 on Tuesday, down from its previous close of 80.64 late Monday in North American trade. The dollar scaled a high of 80.67 intraday and a low of 80.45. The euro traded lower against the dollar at $1.3639 on Tuesday, as compared to its previous close of $1.3646 late Monday in North America. The euro scaled a high of $1.3689 intraday and a low of $1.3630.
In economic news, wholesale inventories in the U.S. rose 0.3 percent in December after rising by 0.5 percent in November. Economists expected an increase of 0.5 percent. The modest growth reflects a 1.3 percent increase in durable goods inventories, due partly to a 5.3 percent jump in inventories of computer equipment. The National Federation of Independent Business’s small business optimism index in the U.S. crept higher in January. A gauge of retailer sentiment, the index rose to 94.1 from 93.9 the previous month.
Meanwhile, the Confederation of British Industry expressed concerns about political uncertainty as the nation enters a lengthy election campaign. The business lobby projects 2.6 percent growth this year, up from its November forecast of 2.4 percent, which reflects a stronger-than-expected economic performance at the tail end of 2013. For 2015, the Confederation estimates 2.5 percent expansion, slightly down from 2.6 percent forecast in November, which are broadly in line with estimates of a wide range of forecasters. Quarter-on-quarter, gross domestic product growth is expected at 0.6 percent this year, and quarterly growth rates of around 0.6 percent to 0.7 percent in 2015.
Source: RTT Staff Writer
Source:Bullion Bulletin

Share on

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.