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Gold Swings Between Gains & Losses as Traders Wait for Rate Hikes from Fed

February 14, 2017 at 22:29 by Vladimir Vyun

Gold rose above the opening level as of now, but the metal was swinging between gains and losses during the trading session as market participants were speculating about probable interest rate hikes from the Federal Reserve this year. Other precious metals were trading above the opening level as well.

Fed Chairwoman Janet Yellen was fairly hawkish in her testimony on the Monetary Policy Report delivered to the Congress today, saying:

As I noted on previous occasions, waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession. Incoming data suggest that labor market conditions continue to strengthen and inflation is moving up to 2 percent, consistent with the Committee’s expectations.

CME FedWatch shows about 70% chance of a hike in June, and traders anticipate overall three rate increases in 2017.

Gold also lost part of its appeal after the recent big rally of stocks that made investors prefer assets that provide yield, even though they are usually associated with higher risk.

Future for delivery of gold in April gained 0.31% to trade at $1,229.6 per troy ounce as of 22:05 GMT on COMEX today. March contract for silver advanced 0.72% to $17.95 per ounce. Spot price for platinum was up by 0.33% to $1,001.75 per ounce while palladium was little changed at $781.4 per ounce.

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