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Gold futures lower ahead of Yellen testimony

Published 02/27/2014, 03:22 AM
Gold edges lower ahead of Yellen testimony

Investing.com - Gold prices declined for the second consecutive session on Thursday, as investors looked ahead to testimony from Federal Reserve Chair Janet Yellen in front of the Senate later in the day for clues regarding the future of course of U.S. monetary policy.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded in a range between $1,324.20 a troy ounce and $1,331.40 an ounce.

Gold prices last traded at $1,325.00 an ounce during European morning hours, down 0.25%.

Gold futures rose to $1,345.60 an ounce on Wednesday, the most since October 30, before turning lower to settle at $1,328.00 an ounce, down 1.09%, or $14.70.

Prices were likely to find support at $1,307.10 a troy ounce, the low from February 20 and resistance at $1,345.60, the high from February 26.

Meanwhile, silver for May delivery shed 0.55% to trade at $21.17 a troy ounce, the lowest since February 14. The May contract plunged 3.24% on Wednesday to settle at $21.28 an ounce.

Gold and silver prices weakened on Wednesday after the release of unexpectedly strong data on U.S. new home sales eased concerns over the health of the economy.

Investors were looking ahead to testimony by Federal Reserve Chair Janet Yellen later in the session after a recent spate of disappointing U.S. economic indicators raised some doubts over whether the central bank will maintain the current pace of reductions to its stimulus program.

Ms. Yellen was expected to reiterate that the U.S. central bank would continue to roll back its asset purchase program, as long as the economy improves as expected.

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The U.S. was also due to release data on durable goods orders, a leading indicator of production, and the weekly report on initial jobless claims later in the session.

A recent series of disappointing U.S. economic indicators have sparked concerns that the recovery has lost momentum since the end of last year as inclement winter weather weighed on growth.

Gold and silver prices have been well-supported in recent weeks amid expectations that U.S. monetary policy will remain accommodative. Gold has gained nearly 7.5% since the beginning of the year, while silver has picked up approximately 6%.

Elsewhere on the Comex, copper futures for May delivery declined 0.45% to trade at $3.201 a pound.

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