London - Gold rebounded from the lowest level in seven weeks and silver rose after Federal Reserve Chair Janet Yellen signalled an interest-rate increase isn’t imminent. Palladium climbed to the highest in six weeks.
Yellen, testifying to the Senate Banking Committee on Tuesday, indicated that a change in the Fed’s guidance on interest rates won’t lock the central bank into a timetable for tightening. Higher interest rates curb gold’s appeal because the metal generally gives returns only through price gains.
While the labour market is improving, inflation and wage growth remain too low, Yellen said. She is scheduled to appear before the House Financial Services Committee on Wednesday. The Bloomberg Dollar Spot Index was 0.2 percent lower, falling for a second day.
“Yellen seemed to indicate that she will not put rates up for another two quarters,” Carole Ferguson, an analyst at SP Angel Corporate Finance LLP, said in a phone interview from London. “This is being read as supportive for gold and negative for the dollar.”
Bullion for immediate delivery climbed as much as 1 percent to $1,211.94 an ounce and was at $1,207.40 at 10:54 a.m. in London trading, according to Bloomberg generic pricing. Gold dropped to as low as $1,190.52 on Tuesday, the lowest price since January 5. Prices fell the past four days.
Gold for April delivery rose 0.8 percent to $1,206.50 an ounce on the Comex in New York, rebounding from three days of losses. Futures trading volumes in New York were 24 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Holdings in bullion-backed exchange traded products increased for a fifth session to 1,679.8 tons as of Tuesday, the highest since October, according to data compiled by Bloomberg.
Prices may get a boost from buyers in China, who returned from a week-long holiday on Wednesday, Howie Lee, an investment analyst at Phillip Futures Pte, wrote in a note.
Palladium for immediate delivery advanced as much as 1.2 percent to $804.72 an ounce, the highest since Jan. 14. Silver climbed 1.4 percent to $16.52 an ounce. Platinum added 0.5 percent to $1,170.25 an ounce.
Bloomberg