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.”