Gold dips after the US Fed hints at rate hike lifts the dollar
Federal Reserve chairperson Janet Yellen suggests that US interest rates could rise sooner, seeing dollar climb to three-and-a-half-week high, stocks rally
London — Gold slipped on Wednesday, erasing the previous day’s slim gains, after Federal Reserve chairperson Janet Yellen’s suggestion that US interest rates could rise sooner rather than later drove the dollar to a three-and-a-half week high. Yellen told the Senate banking committee on Tuesday that delaying rate increases could leave the Fed’s policymaking committee behind the curve. Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. Spot gold was down 0.2% at $1,225.49 an ounce at 10.35am GMT. "Gold prices are still under pressure after Yellen’s comments yesterday. The US dollar is doing well," ABN Amro analyst Georgette Boele said. "Today we have consumer price index and retail sales in the US as well. Better data will likely push gold consistently below $1,220." Yellen’s comments boosted appetite for assets perceived as higher risk, such as equities, as we...
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