Gold steady

BENGALURU. — Gold held steady yesterday as investors awaited testimony from US Federal Reserve Chair Janet Yellen and central bank officials expressed caution about further interest rate hikes.

“Gold’s near-term direction will now be at the mercy of whether we get a hawkish Yellen on the Hill,” said Jeffrey Halley, senior market analyst at OANDA.

Yellen was set to give her semi-annual monetary policy testimony before Congress later yesterday and today, and investors will be parsing it for clues on when the Fed will start reducing its $4,5 trillion balance sheet, which would have the effect of tightening US money supply.

Meanwhile, two of her colleagues cited low wage growth and muted inflation as reasons for caution on further interest rate increases.

Any pause in US interest rate increases would be beneficial for gold as investors seek returns in other assets. While dollar-denominated commodities typically rise when the greenback declines, reflecting the intrinsic value of the commodity.

Spot gold rose 0,1 percent to $1 218,46 per ounce at 0719 GMT. US gold futures for August delivery rose 0,3 percent to $1 217,70 per ounce.

“I think we have hit the bottom for the shortterm period and we are trying to go back to the $1 230 level over the next one to two months,” said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank, adding that the weaker dollar was supporting bullion. — Reuters.