LONDON: Gold edged lower yesterday as investors took profits after two days of gains sparked by assurances from the likely new Federal Reserve chief that the US central bank will continue its easy monetary policy for now.
Fed Chair nominee Janet Yellen said on Thursday she would press forward with the central bank’s ultra-easy policy until officials were confident a durable economic recovery was in place that could sustain job creation.
Answering questions before the Senate Banking Committee, Yellen defended the Fed’s steps to spur growth, calling efforts to boost hiring an imperative at a hearing on her nomination to become the first woman to lead the US central bank.
Gold prices have the tendency to edge higher on dovish central bank messages but the impact is rather limited, ABN Amro analyst Georgette Boele said.
Everyone knows this is just a delay and the tapering will happen sooner or later, she added. When you have a stronger economy, the market will start anticipating an increase in interest rates, and that’s not positive for gold.
Spot gold eased 0.3 percent to $1,283.81 an ounce by 1259 GMT, after gaining nearly one percent in each of the previous two sessions. US gold futures for December delivery dropped $2.90 to $1,283.30 an ounce.
Yellen’s comments earlier in the week lifted the metal from a near four-week low of $1,260.89 hit on Tuesday, but prices failed to advance above the crucial $1,300 level.
Reuters
