Gold Lower After Yellen Says Rate Hike on Track in 2015

Gold prices fell to four-month lows on Wednesday, extending losses for a third session as Federal Reserve Chair Janet Yellen said the U.S. central bank remains on track to raise interest rates this year.

In testimony prepared for the U.S. House of Representatives’ Financial Services Committee, Yellen said the labour market is expected to improve steadily, and that turmoil abroad is unlikely to throw the U.S. economy off track.

That knocked gold to a low of $1,145.75 an ounce, its weakest since mid-March.

Spot gold was down 0.6 percent at $1,147.43 an ounce at 1402 GMT, while U.S. gold futures for August delivery were down $7.30 an ounce at $1,146.30.

U.S. stocks opened marginally lower after Yellen’s remarks, while the dollar rose half a percent against a basket of currencies, pressuring gold, which is priced in the dollar.

“Yellen confirming that the Fed will raise interest rates later this year is nothing new, but nevertheless this helped the dollar to appreciate, which is weighing on the gold price,” Commerzbank analyst Daniel Briesemann said.

“We’ve also had better-than-expected economic data out of the United States, both before and after Yellen’s words, so that is also supporting the dollar.”

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.