Gold holds near 4-month low as U.S. rate hike looms
MANILA – Gold hovered near its lowest level since March early on Thursday after Federal Reserve Chair Janet Yellen reiterated that a U.S. interest rate increase is likely this year.
* Spot gold was off 0.1 percent at $1,147.85 an ounce by 0035 GMT, close to Wednesday’s trough of $1,143.43, its weakest since March 17.
* U.S. gold for August delivery was flat at $1,147.10 an ounce.
* Yellen said the U.S. central bank remains on track to raise interest rates this year, with labor markets expected to steadily improve and turmoil abroad unlikely to throw the U.S. economy off track.
* Yellen’s comments were in line with her recent remarks along with the most recent policy statement by the Federal Open Market Committee which will meet next on July 28-29. Yellen is expected to repeat those comments when she testifies before the Senate Banking Committee on Thursday.
* A potential U.S. rate hike boosts the dollar, putting dollar-priced assets such as gold out of favour as they become more expensive for buyers holding other currencies.
* There was more evidence of U.S. economic growth improving, with industrial production rebounding last month and factory activity in New York state picking up in July.
* In Greece, the parliament passed a sweeping package of austerity measures demanded by European partners to open talks on a multi-billion euro bailout package needed to keep the near-bankrupt country in the euro zone.
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* Asian stocks were mostly higher after the Greek parliament approved a bailout plan while the dollar stood tall after Yellen reinforced expectations for a U.S. rate hike. – Reuters