Gold trims gains, stays firm on dovish Yellen comments
Published Nov 15, 2013 01:27PM ET
Stimulus tools such as the Fed's USD85 billion in monthly bond prices seek to spur recovery by driving down interest rates, weakening the U.S. dollar in the process and thus making gold an attractive hedge.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,288.30 during U.S. afternoon hours, up 0.16%.
Gold prices hit a session low of USD1,279.70 a troy ounce and high of USD1,290.60 a troy ounce.
Gold futures were likely to find support at USD1,260.70 a troy ounce, Tuesday's low, and resistance at USD1,325.70, Thursday's high.
The December contract settled down 0.22% at USD1,268.40 a troy ounce on Wednesday.
Yellen told the Senate Banking Committee on Thursday that while the economy is on the mend, inflation and unemployment rates have room to move closer to Fed comfort zones, which markets interpreted as a sign the U.S. central bank wants to see consistent improvements to economic indicators before winding down stimulus tools.
Her comments put to rest lingering expectations that the Fed may announce plans to scale back stimulus tools at its December meeting, which gave gold room to rise as did disappointing U.S. economic indicators.
The Federal Reserve reported earlier that U.S. Industrial production edged down 0.1% in October after having increased 0.7% in September.
Analysts were expecting a 0.2% expansion, and the surprise contraction weakened the dollar by fanning sentiments the Fed won't scale back its USD85 billion in monthly bond purchases until early 2014.
Also in the U.S., the Federal Reserve of Bank of New York said its manufacturing activity index declined to -2.21 in November from 1.52 in October, defying expectations for a rise to 5.00, which added to the dollar's decline.
A separate report showed that U.S. import prices fell 0.7% in October compared to expectations for a 0.4% decline after a downwardly revised 0.1% rise the previous month.
Elsewhere on the Comex, silver for December delivery was up 0.01% at USD20.725 a troy ounce, while copper for December delivery was up 0.40% and trading at USD3.173 a pound.
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Written By: Investing.com
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