Gold edged up to a two-week high and then retraced some gains on Friday, holding steady after Federal Reserve chair Janet Yellen said she still expected gradual U.S. rate increases.
The precious metal had rallied 2.8 percent on Friday after surprisingly weak U.S. jobs data dampened expectations of rate hikes from the Fed. On Monday, Yellen said interest rate hikes were likely because "positive economic forces have outweighed the negative" for the United States, though the weak jobs report bears watching.
"Chair Yellen's delicate dance of emphasizing the positives while acknowledging recent poor payrolls ... has kept gold and other markets largely unchanged, which may have been exactly the intention," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
"It keeps the July meeting in play and shifts focus into June's dot plot."
Rising rates lift the opportunity cost of holding the non-yielding metal, while boosting the dollar, in which gold is priced.
U.S. gold futures for August delivery settled up 0.4 percent at $1,247.40 an ounce.
"The employment report didn't derail the Fed's desire to raise rates later this year, but given the volatility observed in the data recently, the path is still expected to be very gradual," said Royce Mendes, director and senior economist at CIBC Capital Markets in Toronto.
Reference: Reuters
Thai
Eng