Gold Trades Flat Amid Conflicting Pressures
19 January 2017 - 10:02PM
Dow Jones News
By Ed Ballard
LONDON--Gold prices bounced between gains and losses Thursday,
as a weaker dollar was counterbalanced by U.S. Federal Reserve
Chairwoman Janet Yellen's warning Wednesday that waiting too long
to raise interest rates could invite in the "nasty surprise" of
inflation.
Gold was recently down 0.02% at $1,204.30 a troy ounce in
midmorning trade in London.
Ms. Yellen said Wednesday the Fed expected to raise rates "a few
times a year" through 2019, a faster pace than some market
participants expect. Gold struggles to compete with yield-bearing
investments when borrowing costs rise.
After climbing in the wake of Ms. Yellen's speech, the dollar
ticked lower Thursday, with the WSJ Dollar Index recently down 0.2%
at 91.75. A weaker dollar typically helps dollar-priced commodities
like gold, as it makes them less expensive for holders of other
currencies.
Analysts at ANZ Bank said buying by Chinese investors ahead of
the Lunar New Year holiday at the end of this month was also
providing some support for gold.
The precious metal plummeted after the election of Donald Trump
as expectations of tax-cuts, higher inflation and rising interest
rates sucked money into riskier assets and sent the dollar soaring,
but has recovered around 4% this year.
The attention of investors seeking to chart the likely path of
U.S. interest rates will turn back to Ms. Yellen, who is due to
address the economic outlook in a speech at Stanford University at
01:00 GMT Friday.
Before that, Thursday's session brings housing starts data from
the Commerce Department and a business outlook survey from the
Federal Reserve Bank of Philadelphia.
Other precious metals were mixed. Silver shed 0.5% to $17.00 an
ounce, platinum was up 0.1% at $964.15 an ounce, and palladium was
gained 0.3% to $751.65 an ounce.
Write to Ed Ballard at ed.ballard@wsj.com
(END) Dow Jones Newswires
January 19, 2017 05:47 ET (10:47 GMT)
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