New York, US (BBN) – Gold prices gained in Asia on Thursday, shrugging off remarks by a key Fed policymaker that rates could soon rise going by current economic signals.
Gold for April delivery on the Comex division of the New York Mercantile Exchange rose 0.34 per cent to $1.237.25 a troy ounce, while silver traded up 0.30 per cent to $18.017 a troy ounce, reports
Copper futures gained 0.40 per cent to $2.752 a pound.
The Federal Reserve aims to raise US interest rates soon, New York Fed President William Dudley said Wednesday, if, as expected, fiscal policies provide stimulus.
“We expect to gradually remove further monetary policy accommodation and snug up interest rates a little bit further in the months ahead,” Dudley said.
Overnight, gold Futures benefited from a retreat in the dollar, despite strong US economic data which confirmed that the growth story in the US economy remains on track.
Gold’s comeback from its three-month low of $1123.50 set on December 1, appears to be at risk as expectations of a March rate hike accelerate.
On Tuesday, Federal Reserve Chair Janet Yellen in a testimony to congress said that it would be unwise to keep interest rates lower for longer.
Philadelphia Fed President Patrick Harker and Boston Fed President Eric Rosenberg further fueled expectations of a rate hike sooner rather later, as they both said they see at least three-rate hikes this year.
In a rising dollar and higher interest rate environment, gold typically loses its shine among investors as its denominated in dollars and doesn’t yield a rate of return.
Gold shrugged of expectations of an rate hike and bounced off session lows of $1217.50, as the dollar rally fizzled out, which prompted a revival in commodities across the board.