Gold and Silver bullion is offered for sale at the Chicago Coin Company May 11, 2006 in Chicago, Illinois.
Scott Olson | Getty Images
Gold prices ticked higher on Wednesday as the dollar retreated from a one-month peak after U.S. Federal Reserve Chair Jerome Powell did not revert to a more hawkish stance despite last week’s stronger-than-expected jobs report.
Spot gold was up 0.4% at $1,882.56 per ounce. U.S. gold futures firmed 5% at $1,894.70.
“No major takeaways for gold from Powell’s comments yesterday as gold prices were already corrected due to last week’s positive economic release,” said Hareesh V, head of commodity research at Geojit Financial Services.
Traders are tracking the performance of the dollar and the global economic situation to get a direction while awaiting fresh cues, Hareesh said further.
Powell reiterated on Tuesday that inflation was starting to come down, but cautioned last week’s blockbuster jobs report showed why the battle against inflation will “take quite a bit of time” and interest rates might need to move higher than expected.
Following Powell’s remarks, the dollar index eased from a one-month high and was down 0.1% on the day. A weaker dollar makes greenback-priced gold a more attractive bet for buyers holding other currencies.
Minneapolis Fed President Neel Kashkari said the Fed would probably have to raise interest rates to at least 5.4% in order to tame high inflation.
Market participants see interest rates rising above 5% in May.
Although gold is seen as an inflation hedge, high interest rates lift the opportunity cost of holding the non-yielding asset.
Meanwhile, China held 65.12 million fine troy ounces of gold at the end of January, up from 64.64 million ounces at the end of December, central bank data showed.
