Gold futures firm as market tries to halt latest skid at three sessions
New York (Feb 14) Gold futures snapped back modestly early Tuesday after suffering their largest single-session loss in some three weeks, as the dollar softened slightly.
The U.S. stock rally also looked to take a breather, boosting short-term interest in haven investments including gold.
April gold GCJ7, +0.56% rose $4.90, or 0.4%, to $1,230.70 an ounce. Prices notched their third straight session loss on Monday, even after they logged a sixth weekly rise in seven weeks on Friday.
Trading in the near term has largely shadowed the dollar. Gold is traded in dollars, so moves for the U.S. currency can influence the metal’s attractiveness to those using other monetary units.
The ICE U.S. Dollar Index DXY, -0.23% fell 0.3% early Tuesday.
Currency and metals investors will hear from U.S. Federal Reserve Chairwoman Janet Yellen, who will appear before the Senate Banking committee at 10 a.m. Eastern Time on Tuesday and before the House Financial Services Committee on Wednesday.
Charalambos Pissouros, senior analyst with IronFX Global, noted that Yellen was “relatively upbeat” in her last speech, when she indicated that the U.S. is closing in on maximum employment and that inflation is moving toward the Fed’s goal.
“She also said that the timing of the next rate hike will depend on the economy over the coming months. Given that since then U.S. data have been generally strong, if one overlooks the disappointing wage growth print in January, we do not see a material reason for Yellen to deviate from her previously optimistic stance,” he said.
“Overall, confident remarks from the Fed chief with regards to the economy and the Fed’s progress towards its dual mandate could cause the probability for a March hike to surge [currently priced in at an 18% chance, according to Fed funds futures], and may thereby bring the dollar under renewed buying interest,” said Pissouros.
March silver SIH7, +0.78% rose 10 cents, or 0.6%, to $17.93 an ounce. Copper prices HGH7, +0.65% continued to edge higher as supply issues spread. On the London Metal Exchange, three-month copper rose by 0.42% to $6,153 per metric ton, its highest level since late May 2015.
The exchange-traded fund SPDR Gold Trust GLD, +0.40% was up 0.3% premarket, while the VanEck Vectors Gold Miners ETF GDX, +1.24% rose 0.7%.
Source: Reuters
