Gold prices rose on Wednesday, edging further from this week's near four-month low after comments from Federal Reserve Chair Janet Yellen curbed speculation that US interest rates would rise more than once this year. In congressional testimony, Yellen said that given current estimates the Fed would not need to lift rates all that much further to reach a neutral level that neither encourages nor discourages economic activity.
That weighed on the dollar and US Treasury yields, helping lift gold further from Monday's trough of $1,204.45, the weakest price since mid-March. Spot gold was 0.24 percent at $1,220.26 per ounce by 3:02 pm EDT (1902 GMT). The most-active US gold futures for August delivery settled up $4.40 or 0.36 percent, at $1,219.1 per ounce. Prices had rallied as much as 1.8 percent from Monday's near four-month low of $1,204.
"Gold reacts negatively to a rising interest rate atmosphere, but there are limits to that," said James Steel, an analyst at HSBC Securities (USA) Inc. Yellen's statements indicated that "tightening policies will not necessarily be abrupt," Steel said.
Among other precious metals, silver, which hit its lowest since April last year during a flash crash on Friday at $14.86, was 0.72 percent at $15.89. Palladium gained 1.53 percent at $862.98 an ounce. Platinum was up 1.33 percent at $912.99, recovering from Tuesday's year-to-date low of $886.15 an ounce.
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