Investing.com - Gold prices fell during Asian trading hours on Thursday after climbing sharply overnight as investors continued to cheer Federal Reserve Chair Janet Yellen's commitment to tapering stimulus measures.
Stimulus measures such as Fed bond purchases tend to weaken the dollar by suppressing long-term interest rates to make stocks more attractive, thus bolstering gold's role as a portfolio hedge.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,292.70 a troy ounce during Asian trading, down 0.18%.
On Wednesday, the April contact hit a session low of USD1,290.50 and off a high of 1,292.70 and settled up 1.18% at USD1,295.00.
Futures were likely to find support at USD1,265.00 a troy ounce, Monday's low, and resistance at USD1,325.70, the high from Nov. 7.
In prepared remarks to the House Financial Services Committee on Tuesday, Fed Chair Yellen suggested that the central bank would taper the pace of its asset purchases at future meetings if the economy continued to improve as expected.
However, Yellen added that the pace of the central bank’s bond purchases are not on a “preset course” and reiterated that the Fed plans to hold interest rates near zero “well past” the time the jobless rate falls below 6.5%.
Also bolstering gold prices were Yellen's observations that "the recovery in the labor market is far from complete" despite progress seen over the last year, describing the country's 6.6% unemployment rate as "well above levels" that Fed officials consider sustainable in a healthy economy.
The Fed is currently purchasing USD65 billion in Treasury holdings and mortgage debt a month to suppress interest rates to spur recovery, and Yellen's words, while in line with market expectations, kept expectations firm that monetary authorities will trim asset purchases on a gradual basis, while tightening remains far off on the horizon.
Meanwhile, silver for March delivery fell 0.47% and trading at USD20.245 a troy ounce, while copper futures for March delivery were down 0.08% at USD3.252 a pound.