Gold Rises After Fed’s Patience to Linger

Gold futures rebounded from a seven-week low after Federal Reserve Chair Janet Yellen signaled an interest-rate increase isn’t imminent. Palladium climbed to the highest in almost six weeks.

Yellen, testifying to the Senate Banking Committee on Tuesday, indicated that a change in the Fed’s guidance on interest rates won’t lock the central bank into a timetable for tightening. Higher interest rates curb gold’s appeal because the metal generally gives returns only through price gains.

Gold has increased 1.8 percent this year as signs of an economic slowdown in China and turmoil over Greece’s debt boosted demand for haven assets. While the U.S. labor market is improving, inflation is below the Fed’s goal and wage growth is “sluggish,” Yellen said. She’s scheduled to appear before the House Financial Services Committee on Wednesday.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza