Gold Steady After Post Yellen Speech

Gold prices are trading not far from unchanged levels in early U.S. dealings Wednesday. The market is pausing and consolidating after the solid gains posted Tuesday afternoon that did reinvigorate the gold market bulls. June Comex gold was last down $1.70 at $1,235.60 an ounce. May Comex silver was last up $0.127 at $15.36 an ounce.

The U.S. ADP March national employment report was just released and showed a jobs gain of 200,000, which was in line with market expectations.  The markets saw little reactions to the data. This report comes just ahead of Friday’s important U.S. employment report from the Labor Department.

Asian and European stock markets were mostly higher Wednesday, on bullish reactions to remarks from Federal Reserve Chair Janet Yellen’s speech to the Economic Club of New York on Tuesday afternoon. U.S. stock indexes are pointing to higher openings on follow-through buying interest from Tuesday’s solid gains.

The marketplace deemed Yellen’s comments as fully dovish on U.S. monetary policy. Yellen said the U.S. economic growth pace has weakened and the pace of interest rate increases by the Fed will be only gradual. She said global developments and slow world economic growth also pose ongoing risks for the U.S. economy. Yellen also said the FOMC is not on a preset course of monetary policy tightening. Just recently, many market watchers were thinking the Fed might raise interest rates as soon as next month. However, Yellen’s remarks Tuesday put the monetary hawks in a cage.

The U.S. dollar index has weakened significantly in the wake of Yellen’s dovish speech Tuesday afternoon. The depreciating greenback this week has helped to lift crude oil prices and some other raw commodity markets. Nymex crude oil prices are presently hovering around $39.00 a barrel.

via Kitco

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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