Investing.com - Gold prices rose slightly in Asia on Tuesday as the dollar traded mixed following overnight comments from Fed Chairwoamn Janet Yellen.
On the Comex division of the New York Mercantile Exchange, gold for June delivery traded at $1,284.50 a troy ounce, up 0.05%, after hitting an overnigh session high of $1,299.10 and up from a low of $1,283.00
Gold prices fell earlier Monday on talk of waning physical demand in Asia, while dovish policy comments from Yellen failed to boost the precious metal into positive territory.
In her first major speech as Fed Chair, Yellen told the National Interagency Community Reinvestment Conference in Chicago, Illinois, that the U.S. economy still needs monetary support to ensure more sustained recovery.
"I believe it is appropriate for the Federal Reserve to continue to provide substantial help to the labor market, without adding to the risks of inflation, is because of the evidence I see that there remains considerable slack in the economy and the labor market," Yellen said in prepared remarks of her speech.
The Fed is currently purchasing $55 billion in bonds a month to spur recovery, a monetary policy tool known as quantitative easing that suppresses interest rates to prop up the economy, weakening the dollar and bolstering gold as side effects.
Yellen''s words sent investors reevaluating the pace at which the U.S. central bank will taper its bond-buying program that has boosted gold prices for well over a year.
"I think this extraordinary commitment is still needed and will be for some time, and I believe that view is widely shared by my fellow policymakers at the Fed," Yellen said
Investors snapped up equities over gold in wake of Yellen''s dovish policy comments, as companies will reap the benefits of an improving economy down the road even as interest rates rise, while gold''s popularity as a hedge during times of loose monetary policy will wane.
Elsewhere, data revealed that manufacturing activity in the Chicago region expanded at a slower rate than forecast in March, as new orders fell.
The Chicago purchasing managers’ index fell 55.9 from 59.8 in February. Analysts had expected the index to tick down to 59.0.
Elsewhere on the Comex, silver for May delivery fell 0.28% and trading $19.697 a troy ounce, while copper for May delivery was down 0.09% and trading at $3.024 a pound.
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