• Gold futures on the COMEX division of the New York Mercantile Exchange rose on Wednesday as a technical bounce and a weaker U.S. dollar supported the precious metal.
• The most active gold contract for March delivery rose 7.7 U.S. dollars, or 0.63 percent, to settle at 1,233.10 dollars per ounce.
• Analysts note that the precious metal hit a key technical support level of 1,218 U.S. dollars, which triggered a bounce in the price of gold, bringing it back up. Additionally, the U.S. Dollar Index fell by 0.05 percent to 101.18 as of 1805 GMT.
• Investors believe that this rally is likely to be short-lived as the U.S. Federal Reserve Chairwoman Janet Yellen hinted to Congress during testimony on Wednesday that she sees inflation increasing. Since the Fed is duty-bound to control inflation and promote employment, this could result in a rate hike sooner rather than later.
However, Fed Chair Janet Yellen, in her second day of economic testimony before Congress, offered no additional insight on the timing of the central bank's next rate hike after her comments a day earlier had hinted at a fairly hawkish policy stance.
• As of Wednesday, the odds for a rate hike have increased significantly. Investors believe the Fed may raise rates from 0.75 to 1.00 during the May FOMC meeting at the earliest. According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 27 percent at the March meeting and 50 percent for the May meeting.
• Silver for March delivery rose 7.4 cents, or 0.41 percent, to close at 17.963 dollars per ounce.
Reference: Xinhua, Reuters
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