Gold ditched earlier gains in volatile trade amid speeches from U.S. Federal Reserve members.
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We have a high volatility on all major currencies pair after the Yellen’s speech, the United States dollars has increased a little in the fist minutes, but the bears have taken the full control and have sent the currency down versus its rivals, this drop could be only temporary because the FED Chair has said the following: “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months”, so the USD buyers could step in again.
Spot gold was up 0.2 percent at $1,323.81 an ounce at 0407 GMT after touching a 4-week low of $1,317.46 in the previous session, and looked set to post a weekly loss of over 1 percent.
“Fischer’s hawkish interpretation of Chair Yellen’s comments has hamstrung the gold bull with bullion sliding back close to day’s lows”, said Tai Wong, director of base and precious metals trading for BMO Capital Markets in NY. “That would lead to disappointment, (and the expectation that) interest rates would remain low for longer, and that would help gold”.
Spot gold was up 0.02 percent at $1,321.52 an ounce by 3:00 p.m. EDT (1900 GMT).
The US dollar rose Friday against the euro, the yen and the British pound following remarks from the US central bank favoring a near-term increase in interest rates.
Speaking early Friday morning in Jackson Hole, Wyoming, Yellen cited improvements in the US labour market and expectations for moderate economic growth, reinforcing the view that such a move could come later this year. She did not, however, lay out a clear roadmap for what the Fed needs to see to raise rates.
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The Dow Jones industrial average held about 40 points lower after briefly falling more than 100 points. Palladium was 0.1 percent lower at $683.30.
