Today’s AM fix was USD 1,282.75, EUR 938.09 and GBP 780.83 per ounce.
Yesterday’s AM fix was USD 1,273.50, EUR 933.86 and GBP 776.95 per ounce.
Gold has rallied another 1.2% today and touched resistance at $1,294/oz during Yellen's first testimony to Congress. Gold is testing resistance between $1,294/oz and $1,300/oz. A close above $1,300 should see gold quickly rally to test the next level of resistance at $1,360/oz. Support is at $1,240/oz and $1,180/oz.
Gold for immediate delivery rose a fifth day and is headed for its longest rally since August before Federal Reserve Chairman Janet Yellen addresses Congress today. Chinese demand continues to be very robust and volumes for spot bullion of 99.99 percent purity on the Shanghai Gold Exchange (SGE) climbed to 25,725 kilograms yesterday, the most since May.
Gold has climbed 7% this year in dollar terms amid currency turmoil in emerging markets and stocks falling sharply globally. $1.63 trillion has been erased from the value of global equity markets.
Gold is over 10.5% higher in terms of the Dow Jones Industrial Average year to date. Gold’s properties as a safe haven asset and important diversification are being seen again.
Gold fell 24% last year after rising 70% from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system.
Janet Yellen will today deliver her first testimony to Congress since being sworn in as Federal Reserve chairman. Yellen delivers her first semi-annual monetary-policy testimony as investors weigh the pace of a slight reduction in quantitative easing against the recent poor U.S. economic data.
Worries about weak U.S. labor market data had some investors betting that Federal Reserve Chair Janet Yellen may signal a pause in the central bank's efforts to wind down its extraordinary bond-buying programme.
There is an expectation that Yellen is going to be dovish, especially given the recent weakness in U.S. employment numbers. However, Yellen could surprise markets by adopting a more hawkish tone regarding monetary policies in the very short term. If she does, then expect a further bout of risk-off and more weakness in stock markets.
However, it is important to focus on actual monetary policy which remains very loose rather on the mere words of the new Fed head.
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