Investors have good news for now they can invest in gold which has gone up the most in three months. On Tuesday’s trading, spot gold climbed to its highest in nearly three months. Also, a better trade is expected as the U.S. gold futures rose 1 percent, gaining for a fifth day in a row.
Thus, so far U.S. gold futures has seen the longest winning streak since August 2012, which is a positive for investors who expect that the new Federal Reserve chief later in the session will discuss on whether the pace of its stimulus tapering may be slowed.
A lot of things depend on the Fed Chair Janet Yellen’s statement which she is going to give in her first testimony before the House Financial Services Committee at 1500 GMT. She might be questioned on the employment data which was not up to expectations.
Gold Gains Strength As the USD Weakens Against its Peers
According to observers who are keeping their eyes on the gold market, the prices are up as the U.S. dollar has weakened a little bit. The USD has been hit a lot in the last two weeks by major currencies. At 0745 GMT, spot gold was up 0.8 percent at $1,283.95 an ounce.
Thus, after gaining 1.4 percent in the past two sessions, the yellow metal is going up and up and so far has gained 1 percent to $1,287.01 earlier in the session which is the highest since mid-November. Even the U.S. gold futures for April delivery were up. It rose as much as 1 percent to $1,287.50.
Stimulus Tapering and Gold Prices
Market observers believe that the increase in the gold prices takes place when investors look for it as a safe investment, particularly when they are averse to investing in stocks. It might also have gained as Bitcoin, another better trading/investment option is not faring well these days.
It is expected that the recent weak economic data, including Friday’s nonfarm payrolls report, could have some impact on the decisions that the new Fed chief makes. She might rethink about the stimulus tapering which was decided by the previous head after considering the better economic data.
Market observers believe that if the Fed could pause the stimulus tapering due to deteriorating economic conditions, it would trigger a rally in gold which has been trading near its highest in two weeks on Tuesday.
To contact the reporter of this story: Jonathan Millet at email@example.com