Spot gold touched its lowest since July 26 at $1,314.70, and was down 0.1 percent at $1,319.81 an ounce at 1135 GMT.
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Fischer said later on Friday that Yellen’s speech was consistent with expectations for possible rate increases this year, sending the dollar higher and stocks and Treasury prices tumbling. WSJ Dollar Index, that measures United States currency vis-a-vis 16 other currencies went up 0.8 percent on the same day.
The benchmark CAC 40 was down 27 points or 0.61 percent at 4,414 in late opening deals after gaining 0.8 percent in the previous session.
“I think the market’s getting more comfortable with the idea that the Fed is going to raise rates this year”, said Chris Zacarrelli, chief investment officer at Cornerstone Financial Partners.
Yellen said a pick-up in the world’s top economy and an improvement in the jobs market meant “the case for an increase in the federal funds rate has strengthened in recent months”.
Expect the markets to place enormous emphasis on this Friday’s USA jobs data for their vindication on rate hike timing.
Japan’s benchmark Nikkei 225 added 2.3 percent to close at 16,737.49. The Standard & Poor’s 500 index climbed 11.34 points, or 0.5 percent, to 2,180.38.
She said the case for an interest rate hike has strengthened in recent months as the labour market and economy improved.
Wells Fargo rose 2.5 percent and provided the biggest boost to the S&P, while JPMorgan and Bank of America rose about 1.1 percent. The Nasdaq composite edged up 13.41 points, or 0.3 percent, to 5,232.33. Platinum, the biggest faller among the major precious metals last week, was up 0.4% at $1,072 an ounce, while palladium was up 0.5% at $688.60 an ounce.
Concerns about the strength of the USA economy remain, and were underscored by Friday’s second estimate of US gross domestic product that showed second-quarter growth was slightly lower than previously thought.
He said attention may now be focused on key jobs data, due to be released Friday, “which if it exceeds expectations could provide another compelling reason for the Fed to act”. The yield on Germany’s benchmark 10-year bond briefly rose more than 6 basis points to minus 0.025 per cent – the highest level since June 24 when the result of Britain’s European Union referendum sent shockwaves through markets.
Sterling slipped against the dollar on Tuesday on divergent expectations for monetary policy, with investors increasingly betting USA interest rates could rise by year-end while British rates may be cut again. Labor markets also remain strong.
Brent crude LCOc1 was last down 63 cents, or 1.26 percent, at $49.29 a barrel.
In overnight trading, the dollar has gained against both perceived haven currencies and riskier ones, with USD/JPY up +0.4% at ¥102.21, and EUR/USD down -0.1% at €1.1189.
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West Texas Intermediate crude, the US benchmark for oil, settled lower by 1.39% on Monday to $46.98 a barrel.
