Melbourne - Gold traded above $1,200 an ounce before Federal Reserve Chair Janet Yellen addresses lawmakers in remarks that may give signals about the interest rate outlook and as investors tracked Greek efforts to secure bailout funds.
Bullion for immediate delivery was at $1,203.46 an ounce at 12.44pm in Singapore from $1,201.83 on Monday, according to Bloomberg generic pricing. Prices fell to $1,191.19 on February 23, the lowest since January 5, as Greece sought a deal with creditors to unlock further cash by the end of the month.
Yellen is scheduled to testify in the Senate on Tuesday and the House of Representatives the next day. She will probably provide an update on the bank’s view after policy makers signalled at their January 27-28 meeting they’re willing to keep interest rates low for longer given risks to the economy. Greece’s month-old government submitted a draft list of new economic measures to creditor institutions on Monday that are offered in exchange for four months of additional funding.
“Gold hasn’t really accelerated as a result of what people perceive as a dovish message from the Fed and gold hasn’t gapped down as a result of the agreement in Greece,” said Wayne Gordon, an analyst at UBS Group AG. “All eyes are to the Fed meeting in March, that’s the critical piece of the puzzle.”
Many central bank officials pointed to risks ranging from a stronger dollar to the turmoil in Greece as weakening the case for the first rate rise since 2006, according to the record of the bank’s January meeting, released on February 18. Fed policy makers next meet March 17-18.
Lagarde’s view
The Greek proposals to get an extension need to be validated by the International Monetary Fund, the European Central Bank and the European Commission, and then put to national parliaments. IMF Managing Director Christine Lagarde said that she hoped there would be a meeting of minds.
Gold for April delivery added 0.2 percent to $1,202.80 an ounce on the Comex. The most-active contract fell as much as 1.2 percent to $1,190.60 on Monday, the lowest since January 5.
Silver for immediate delivery advanced 0.3 percent to $16.3835 an ounce, extending Monday’s 0.6 percent gain. Spot platinum rose 0.4 percent to $1,168.38 an ounce, set for the first climb in six days. Palladium increased 0.3 percent to $789.75 an ounce.
Bloomberg