US MIDDAY: gold climbs

Gold rose early on Wednesday, recovering from the previous day's seven-week low, after US Federal Reserve Chair Janet Yellen suggested the Fed was in no rush to raise interest rates. Her comments weighed on the dollar, supporting gold. Spot gold was at $1,201.74 at 1446 GMT, up 0.2 percent, after hitting a peak of $1,211.80 an ounce. US gold futures for April delivery settled up $4.20 an ounce at $1,201.50.
Yellen held back on Tuesday from giving a clear view on when the Fed will begin raising rates. The ensuing rally in precious metals on Wednesday pushed silver up more than 3 percent and palladium to a six-week high. Yellen said that while the Fed is preparing to consider rate hikes on a "meeting-by-meeting basis", an increase is not likely for at least the next couple of meetings.
"Yellen's comments yesterday suggesting the Fed will look at interest rates one meeting at a time were seen as providing less certainty of when an interest rate hike will be," Citi analyst David Wilson said. Global stock markets rose slightly on Wednesday, helped by stronger-than-expected Chinese factory data and by Yellen's comments. "We ... still believe longer term gold trades higher from these levels as there remain a raft of global events that are supportive, and with central banks still adding reserves (net), according to IMF data, there should be a natural floor," Steve Scacalossi, head of sales at TD Securities, said in a note.
Overnight in Asia, gold rose more than 1 percent to a session high after Chinese buyers returned from the Lunar New Year holiday, driving premiums higher on the Shanghai Gold Exchange. SGE premiums rose to $5-$6 an ounce over global spot prices from $3-$4 before the New Year break began on February 18, reflecting firm demand from the world's second-largest gold consumer.
"China returned from their Lunar New Year holidays today and we saw strength across the board for the precious metals," MKS said in a note. "Good demand (was) evident throughout the entire first session after the week-long break." Silver was up 1.6 percent at $16.47 an ounce. Spot platinum was up 0.8 percent at $1,167.70 an ounce, while spot palladium was up 1.9 percent at $805.10 an ounce, off a six-week high of $808.75 hit earlier in the session.