Gold futures settled lower on Wednesday, edging down for a second straight day as equity markets gained and the dollar stayed above the flat line for much of the day’s session, continuing to benefit from the Fed Chair’s comments about monetary policy stance.
Higher U.S. Treasury bond yields continued to put pressure on gold prices.
The dollar index, which advanced to 90.43 by mid morning, later dropped to 90.20, up just marginally from previous close.
Gold futures for April ended down $8.00 or about 0.4% at $1,797.90 an ounce.
Silver futures for March ended higher by $0.171 or 0.6% at $27.859 an ounce, while Copper futures settled at $4.2945 per pound, gaining $0.1160 or 2.8%.
Recent worries about higher interest rates and inflation eased somewhat after Powell reiterated interest rates will remain at near-zero levels and the Fed will continue its asset purchases at the current rate until “substantial further progress” has been made toward its goals of maximum employment and price stability.
The U.S. economy was “a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” Powell said.
Powell reiterated that any rise in inflation will likely be transitory and is unlikely to have a persistent effect on the economy.
Meanwhile, data released by the Commerce Department today showed new home sales spiked by 4.3% to an annual rate of 923,000 in January after soaring by 5.5% to a revised rate of 885,000 in December.
Economists had expected new home sales to surge up by 1.5% to a rate of 855,000 from the 842,000 originally reported for the previous month.
The material has been provided by InstaForex Company – www.instaforex.com