Gold Weaker On Mild Profit-Taking; Fed Chair Yellen’s Remarks A Non-Event

(Kitco News) - Gold prices ended the U.S. day session modestly lower but up from the daily low Wednesday, on a technical correction and some mild profit taking from the short-term traders following recent solid gains. Gold prices hit an eight-month high and poked above $1,200.00 on Monday. Less risk aversion in the marketplace Wednesday was also a negative for safe-haven gold. April Comex gold was last down $5.40 at $1,193.20 an ounce. March Comex silver was last down $0.189 at $15.26 an ounce.

Market watchers were looking forward to Fed Chair Janet Yellen’s testimony on the U.S. economy before a U.S. House committee on Wednesday. Yellen said recent turbulence in the world stock and financial markets could be impacting U.S. economic growth, and she reiterated futures interest rate increases will be gradual and that the pace of inflation remains very low. Her remarks did not significantly impact the marketplace. Still, many are wondering if the Fed will be able to raise interest rates again this year, as had been its intention until the recent upset in world markets.

There was increased investor and trader risk appetite Wednesday as many world stock markets saw corrective bounces following solid selling pressure seen the first two trading days of this week. European stock indexes were higher and the U.S. stock indexes were also higher in afternoon trading Wednesday. However, the Japanese stock market continued to sell off, with the Nikkei stock index down another 2.3% Wednesday. Australian stocks were also lower. Stock markets in Japan, Australia and China are now considered in bear market territory, as they have lost 20% or more in value from their peaks. China and some other Asian markets are still closed for the Lunar New Year holiday.

Nymex crude oil prices were trading slightly lower and just above $27.00 a barrel Wednesday afternoon. This week’s selling pressure in Nymex crude has pushed prices back down very close to the recent 12-year low. Reports Wednesday said OPEC’s collective crude oil production rose by 131,000 barrels per day in January, to 32.33 million barrels per day. OPEC also stated the obvious by saying that low crude oil prices are hurting the world economy.

In a sign of the troubled times in the world stock and financial markets, a German two-year bond auction fetched a record negative yield of -0.5% Wednesday. German government debt is considered the highest quality and safe-haven by European investors.

Courtesy: Kitco News