Gold hovers near six-week low on Fed Yellen comments

London (Apr 1)  Precious-Gold rebounded slightly on Tuesday to hover near its lowest level in six weeks as investors resorted to riskier assets after Fed Chairman Janet Yellen dovish comments yesterday.   

Yellen said on Monday the U.S. economy will need to hold stimulus for “some time,” following her March-19 comments which included the possibility of raising interest rates in six months after the end of bond purchases withdrawal.

The dovish tone of Yellen sparked strong demand on equities, pushing Asian shares to four-month highs on Tuesday

Later in the day, eyes will watch U.S. ISM manufacturing where analysts predict a rise to 54.0 in March from 53.2 a month earlier.

It seems that demand on the yellow metal is losing momentum once again as investors prefer to put their money in equities.

Data released today from China brought some optimist to markets, as manufacturing PMI rose to 50.3 in March from a previous of 50.2, exceeding analysts’ projections of 50.1.  

Gold is currently trading around $1286.19 an ounce after hitting a high of $1286.71 and a low of $1278.24.

The breach of $1300 cause further sell off in the metal, yet it found support at $1283, which represents 38.2% Fibonacci Retracement to the historic upside trend starting from August 1999.   

It is worthwhile to mention that gold lost 3.63 percent in March after gaining 10 percent in January and February.

The U.S. dollar dropped for a second day versus a basket of major currencies to hover 80.19, falling from a high of 80.28.

Source: icn.com