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Gold rates flat as Janet Yellen’s comments counter muted dollar

Gold rates flat as Janet Yellen’s comments counter muted dollar

05 May 2021

Gold prices were flat on Wednesday, as concerns over possibility of higher U.S. interest rates countered a subdued dollar, while palladium held firm after scaling a record high in the previous session.

Spot gold was unchanged at $1,778.53 per ounce by 0137 GMT, after falling over 1% in the previous session.

U.S. gold futures rose 0.2% to $1,779.00 per ounce.

Palladium rose 0.1% to $2,985.81 per ounce, after scaling an all-time high of $3,017.18 per ounce on Tuesday.

Supply shortfalls were worsened after top producer Nornickel announced disruptions at two Siberian mines due to waterlogging.

The dollar index was down 0.1% against its rivals, making gold less expensive for other currency holders.

U.S. Treasury Secretary Janet Yellen said on Tuesday she sees no inflation problem brewing, downplaying earlier comments rate hikes may be needed to stop the economy overheating as President Joe Biden‘s spending plans boost growth.

Higher interest rates increase the opportunity cost of holding non-yielding bullion.

The U.S. trade deficit jumped to a record high in March amid roaring domestic demand, which is drawing in imports.

The U.S. economy is growing at its fastest rate since the early 1980s while household bank accounts are bulging with cash doled out by the federal government to blunt the impact of the coronavirus pandemic.

Perth Mint’s silver sales rose in April on strong demand, while gold sales eased due to lower output, the refiner said in a blog post on Tuesday.

Silver was steady at $26.52 per ounce, while platinum dipped 0.2% to $1,235.46.

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