NEW YORK/LONDON: Gold rose on Monday on expectations that Federal Reserve Chair Janet Yellen will stay the course in winding down bullion-friendly monetary stimulus, traders said.
Attention this week will be on the first testimony from Yellen to US lawmakers, as financial markets are hoping for reassurance that the Fed's bond purchases will continue for a long time to come.
Analysts said that gold could face strong headwinds from technical selling as prices failed to breach a near three-month high at $1,278 on Monday.
"Gold is currently right up against hard resistance on charts. Unless there is a positive surprise that is way out of the ordinary from Yellen's testimony, I expect it to pull back later this week," said Frank McGhee, head precious metals dealer at Chicago commodities brokerage Alliance Financial LLC.
Spot gold rose 0.6 percent to $1,274.24 an ounce by 2:56 p.m. EST (1956 GMT), extending last week's 1.9 percent rise, its largest weekly increase since the week of Jan. 3.
US COMEX gold futures for April delivery settled up $11.80 at $1,274.70 an ounce.
Trading volume was less than 95,000 lots, about half of its 250-day average, preliminary Reuters data showed.
Traders said that gold was also underpinned by rekindled worries over debt-ceiling talk.
The US Treasury's auction on Monday points to debt ceiling jitters, with the Obama administration's borrowing plans for this week suggesting it is trying to soften the blow to public finances from congressional gridlock over raising a cap on government debt.
US equities were little changed late on Monday. Earlier in the session, gold received a boost as the S&P 500 equities index fell on growth worries.
In physical markets, consumer demand in China, the world's biggest bullion consumer, topped 1,000 tonnes for the first time in 2013, an industry body said on Monday.
Among other precious metals, silver was up 0.3 percent to $20.04 an ounce. Platinum edged up 0.1 percent at $1,380.50 an ounce, while palladium rose 1 percent to $714.75 an ounce.
Earlier on Monday, palladium broke above its 50-day moving averages and was trading near its 100- and 200-day moving averages. However, it retreated in New York's late afternoon trade.
Traders said palladium buying was driven by expectations of better auto demand after heavy selling earlier this year on Chinese growth worries
Comments
Comments are closed.