Gold rises to a three month high in wake of Fed chair Yellen's testimony
After quiet early morning trading, spot gold surges nearly $9 to a three month high at $1295.
The market place is still buzzing about U.S. Federal Reserve Chair Janet Yellen’s inaugural testimony on monetary policy to the Congress Tuesday. Traders and investors examined closely her remarks and prepared text. The market place’s “take-away” from Yellen’s comments Tuesday is that she appears to be following closely in the footsteps of former Fed chairman Ben Bernanke, which is not surprising and does favor the dovish monetary policy camp. Yellen’s remarks were deemed friendly for the gold market and other raw commodity markets, as well as the U.S. stock market.
In overnight news, there was upbeat economic data coming out of China, as its exports were reported up 10.6% in January, year-on-year. This was much higher than the 0.1% rise that was forecast. China imports were also reported up 10% in January, year-on-year—also well above market expectations. This news coming out of the world’s second-largest economy is a bullish underlying factor for the raw commodity sector, including the precious metals.
Risk appetite in the market place has ticked up a bit following news Tuesday the U.S. government said it will ostensibly raise its debt ceiling without a nasty fight among Democrats and Republicans, which had been the case in recent years.
The emerging currency markets have been quiet the past couple weeks, after a rocky start to the new year. Fed Chair Yellen’s perceived dovish monetary policy ideas are somewhat of a salve for the secondary currencies.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE energy stocks report and the monthly U.S. Treasury budget statement.
