Gold prices hit a three-month high today after new Federal Reserve Chairman Janet Yellen said she expects they will continue on their current course for now. The central bank has been cutting back on its bond purchases, which means that the U.S. economy appears to be heading for more growth.
Gold prices bounce
The most actively traded gold contract, which is for April delivery, rose by $17.30, changing hands at $1,292 per troy ounce on the Comex division of the New York Mercantile Exchange, according to The Wall Street Journal. Right after Yellen spoke, gold prices hit a high of $1,294.40 per ounce. She told lawmakers that any noticeable change in outlook for the U.S. economy would result in the central bank considering putting off reducing monthly bond purchases any further.
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Last year gold prices declined 28% as the Federal Reserve indicated that it would start cutting back on monthly bond purchases. That process started in January, and it cut support for gold since many investors had been buying the metal to hedge against a weaker U.S. dollar or inflation.
Yellen urged policy makers not to jump to conclusions when they receive the newest employment information, which was impacted by severe winter weather.
U.S. dollar, stocks also move higher
Reuters reports that global equity markets and the U.S. dollar also rose after Fed Chair Janet Yellen’s remarks. The dollar has now bounced back against the euro and gained versus the yen. The Fed chair said global market volatility doesn’t “pose a substantial risk” to the economic outlook of the U.S. Equity markets advanced in the wake of her comments, as she emphasized continuity from former Fed Chairman Ben Bernanke into her term.
MSCI’s all-country world index, which covers 45 countries, increased .67%, and the emerging markets index rose .93%. The FTSE Eurofirst 300 index increased 1%. In the U.S., the Dow Jones Industrial Average increased .52% or 82.43 points. The S&P 500 index rose .44%, while the NASDAQ Composite advanced .46%.