Gold prices on Thursday, July 13, pulled back after a three-session climb, with the dollar gaining ground against currency rivals and U.S. equities trading mostly higher.
Gold for August delivery GCQ7, -0.11% fell $2.10, or 0.2%, to $1,217.10 an ounce.
Prices have been posting gains since a solid U.S. jobs report issued late last week, which backed the argument for higher interest rates although likely not at a more aggressive pace than the go-slow approach the Fed has signaled. Still, the prospect for gold-negative interest-rate hikes had sent the yellow metal to their lowest level in about four months last week.
Yellen on Wednesday had reaffirmed her outlook for gradual interest-rate increases, helping the Dow industrials mark their first closing record in nearly a month.
Markets broadly interpreted her remarks as relatively dovish, which helped gold on Wednesday hold the mild gains of the past few sessions, said Ilya Spivak, a currency and metals strategist at Daily FX. Yellen “seemed wary of recently slowing inflation and suggested that rates won’t need to rise much further to get to a neutral setting,” he said.
After Yellen’s first day of testimony, Goldman said they saw “a 10% probability (vs. 20% previously) that the next rate hike comes in September, 5% in November and 55% (vs. 50% previously) in December.”
Rising real interest rates lower the opportunity costs of holding gold because the metal provides no yield, and entices investors to rotate into riskier assets like stocks. Higher rates may also boost the value of the dollar which usually moves in the opposite direction of the gold price.
In other trading, silver for September SIU7, -1.11% fell 16.2 cents, or 1%, to $15.725 an ounce.
October platinum PLV7, -1.19% lost $11.10, or 1.2%, to $907.90 an ounce, while palladium for September PAU7, -0.87% fell $7.80, or 0.9%, to $853.75 an ounce. September copper HGU7, -0.69% shed 1.5 cents, or 0.6%, to $2.669 a pound.
Among exchange-traded funds, the SPDR Gold Trust GLD, -0.19% fell 0.2%, the iShares Silver Trust SLV, -1.16% declined 01%, and the VanEck Vectors Gold Miners ETF GDX, -0.69% lost 0.8%.