Gold Rebounds as Dollar Drop Blunts Yellen Inflation Comments
(Bloomberg) -- Gold headed for a second straight gain, recovering from earlier losses that came after U.S. Treasury Secretary Janet Yellen’s comments on interest rates.
Gold fell as much as 0.5% earlier after Yellen’s said Sunday that a slightly higher interest-rate environment would be a plus for the U.S. and the Federal Reserve. Higher rates diminish demand for the non-interest-bearing metal. The Bloomberg Dollar Spot Index declined 0.3% after dropping 0.5% on Friday.
Gold has been hovering around $1,900 an ounce amid a debate around price pressures and speculation over whether the Federal Reserve will start talks on tapering its massive bond-buying program. On Friday, bullion jumped after a U.S. report showed job gains in May fell short of estimates, curbing expectations for early monetary tightening.
Gold is taking “a short breather before it makes its next bid for the $1,900 mark,” Commerzbank AG analyst Carsten Fritsch said in a note. “The environment is conducive to further price rises.”
Hedge funds trading the Comex increased their net-long position in the metal for a fifth straight week, according to weekly U.S. government data published Friday.
Spot gold rose 0.4% to $1,898.49 an ounce at 2:06 p.m. in New York. Prices climbed to $1,916.64 last week, the highest intraday level since Jan. 8. Futures for August delivery on the Comex rose 0.4% to settle at $1,898.80. Spot silver and platinum rose, while palladium fell.
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