Gold Breaks $1270 With Dollar Weakness Ahead of Yellen Testimony

New York (Feb 11)  Gold has broken above critical resistance at $1,270 to close at the highest level in more than two months, while crudeoil continues to tread water around the psychologically significant $100 level ahead of upcoming testimony from Fed Chair Janet Yellen.

US Dollar Weakness Helps Drive Gold and Silver Gains

The US Dollar has continued its drift lower following Friday’s disappointing US NFP data. The second consecutive weaker-than-expected reading has likely prompted speculation over whether the US Federal Reserve will postpone cuts their stimulus program, which in turn has weighed on the greenback and led to gains for gold.

Yellen to Offer Greenback and Commodities Further Guidance

Upcoming testimony from Fed Chair Janet Yellen may offer fresh insights into whether the FOMC will maintain the status quo, which envisions cutting QE asset purchases by a cumulative $10 billion each month. If discouraging jobs data prompts a dovish tone from Yellen, then the US Dollar would likely suffer further declines, which in turn may benefit precious metals. Additionally, the prospect of a less aggressive “tapering” timeline may buoy risk appetite and strengthen growth-sensitive commodities like oil and copper.