Gold futures on Tuesday traded virtually unchanged, but stood near the week’s highest prices ahead of important testimony from Federal Reserve Chairman Jerome Powell, which could provide further guidance to a market faced with steadily rising yields on the prospects of a strong recovery from the COVID-19 pandemic.
Powell, at 10 a.m. EST, is expected to begin the first of two days of testimony in Congress. The Fed chief previously underlined the central bank’s determination not to pull out of monetary stimulus until inflation has passed its 2% target, but investors can be eager to know what the plans by policymakers if a rate hike undermines efforts to keep monetary policy accommodative.
“The market is eagerly awaiting Powell’s testimony on US monetary policy to the Senate Banking Committee on Tuesday morning,” Jim Wyckoff, senior analyst at Kitco.com, said in a daily note.
“The market will be particularly keen to hear what Powell has to say about rising US Treasury yields and the outlook for rising inflation,” the metals analyst wrote. “The stock market became volatile early this week in part due to concerns about rising bond yields starting to take investors’ money out of the stock market,” he wrote.
The 10-year Treasury bill yieldBX: TMUBMUSD10Y held steady at 1.369%, but government bond yields rebounded on higher growth expectations due to lower COVID-19 cases, deployment vaccines and the anticipation of another budget relief program.
Gold has attracted bids in this environment as investors worry about the impact that a rapid rise in yields will have on appetite for assets perceived to be risky, especially those in the trending high-tech sector. to be more vulnerable to higher borrowing costs amid what many consider high valuations.
Tuesday, April or GC00,
was trading 60 cents, or less than 0.1%, down to $ 1,807.80 an ounce, after a 1.7% surge to mark its highest settlement since Feb.12 and the largest rise in the dollar and percentage in a single session since early January, according to Dow Jones Market Data.
Meanwhile, SI00 silver mars,
fell 16 cents, or 0.6%, to trade at $ 27.93 an ounce, after surging more than 3% to the highest level since Feb. 1 for the sister metal to gold.