Gold prices were mostly unchanged on Wednesday as the possibility of higher U.S. interest rates supported the , while palladium held near record highs hit in the previous session amid supply worries.
Spot gold was flat at $1,778.60 per ounce by 0930 GMT, after falling about 0.8% in the previous session. U.S. gold futures were steady at $1,777.
“The dollar index bounced back last week and has generally risen this week. That’s kind of providing some downward pressure on gold prices,” said Fawad Razaqzada, analyst with ThinkMarkets.
The dollar index was hovering close to a near two-week peak against its rivals.
Yellen on Tuesday said she saw no inflation problem brewing, downplaying earlier comments that rate increases may be needed to stop the economy overheating as U.S. President Joe Biden’s spending plans boost growth.
Higher interest rates dull gold’s appeal as it increases the opportunity cost of holding non-yielding bullion.
Meanwhile, investors await U.S. services data on Wednesday and April payrolls on Friday for cues on the health of the U.S. economy.
Elsewhere, palladium rose 0.4% to $2,996.21 per ounce, after hitting an all-time high of $3,017.18 in the previous session, driven by concerns of a shortage of the metal.
Palladium, used mainly in emission-reducing auto catalysts for vehicles, has risen more than 22% so far this year.
Silver was down 0.5% at $26.40, while platinum fell 1.1% to $1,223. Both the metals hit their highest level in more than two months on Tuesday.
“A rebound in industrial activity will bode well for the demand for silver,” said Nitesh Shah, director, research, WisdomTree.