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Gold marks time ahead of testimony from Fed's Yellen
[MANILA] Gold was locked in a narrow range on Wednesday as investors waited for Federal Reserve Chair Janet Yellen's congressional testimony for more clues on the timing of a US interest rate increase this year.
Ahead of Ms Yellen's testimony, data showed economic growth in top gold consumer China held steady at 7 per cent in the second quarter, above market expectations of 6.9 per cent.
Ms Yellen said last week that the Fed was on course to lift rates at some point this year, but an unexpected drop in US retail sales in June renewed concerns the world's top economy may be slowing again. "Markets will want to know whether this year's expected rate hike will be followed by a succession of other increases and how quickly these set in," INTL FCStone analyst Edward Meir said in a note.
Spot gold was little changed at US$1,154.67 an ounce by 0233 GMT, after two days of modest losses.
A looming US rate hike boosts the dollar, putting dollar-priced assets such as gold out of favour as they become more costly for buyers holding other currencies.
US gold for August delivery was also steady at US$1,154.30 an ounce. Spot palladium climbed 1.2 per cent to $658 per ounce, its third gain in four sessions.
US retail sales slipped 0.3 per cent last month, the weakest reading since February, after May's downwardly revised 1.0 per cent increase.
The data came ahead of Yellen's semiannual testimony on monetary policy to the US House of Representatives later on Wednesday at which she is likely to reiterate that it will be appropriate to raise interest rates later this year, a point she again made in a speech last week.
Asian stocks edged higher after the raft of upbeat Chinese data. Apart from gross domestic product, industrial output also beat market estimates, rising 6.8 per cent in June, well ahead of the forecast 6.0 per cent clip.
But Phillip Futures analyst Howie Lee said the recent stock market crash is "expected to have hidden but deep impacts on the economy, and China will face a huge test to manage another 7 per cent growth in the third quarter".