Gold Futures Settle At Near 1-month High As Dollar Weakens

Gold prices climbed up on Wednesday and lifted the most active gold futures contract to a near 1-month closing high, as the dollar weakened against some major rivals, and treasury yields dropped.

The yield on 10-year Treasury Note dropped to 1.36%. The dollar index slid to 92.37, giving up more than 0.4% from Tuesday’s close.

In his prepared remarks before the House Financial Committee, Federal Reserve Chair Jerome Powell reiterated the belief that “substantial further progress” towards the Fed’s goals of maximum employment and price stability is “still a ways off,” suggesting the central bank is not likely to begin tightening monetary policy anytime soon.

The Fed chief also once again stressed that the Fed will provide “advance notice” before announcing any changes to its asset purchase program.

Powell acknowledged that inflation has increased notably and will likely remain elevated in coming months but predicted inflation would moderate as the effects of the production bottlenecks unwind.

Gold futures for August ended up by $15.10 or about 0.8% at $1,825.00 an ounce. Gold stayed firm post-settlement, after the Beige Book released by the central bank said the U.S. economy has “strengthened further.”

Silver futures for September ended higher by $0.131 at $26.271 an ounce, while Copper futures for September settled at $4.2675 per pound, down $0.0395 from the previous session.

The Labor Department said its producer price index for final demand surged up by 1% in June after climbing by 0.8% in May. Economists had expected producer prices to rise by 0.6%.

The report also showed the annual rate of producer price growth accelerated to 7.3% in June from 6.6% in May, reaching the highest level since 12-month data were first calculated in November of 2010.

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