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Gold tips higher ahead of Fed's Powell confirmation hearing

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EZ2   Tuesday, 11/28/17 09:14:52 AM
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Gold tips higher ahead of Fed's Powell confirmation hearing
MARKETWATCH 9:11 AM ET 11/28/17
Gold tipped higher Tuesday as financial markets looked to potentially key developments this week on tax changes and interest-rate policy.

Gold's mild gain defied its typically inverse relationship to the dollar index, which also traded a touch higher.

"Focus for investors and traders this week includes a U.S. tax-cut plan being pushed through Congress, with its eventual passage still uncertain," said Jim Wyckoff, senior metals analyst with Kitco. "The Senate is likely to vote on the tax legislation later this week."

February gold tacked on 40 cents, or less than 0.1%, to $1,299.30 after pushing to above the closely watched $1,300 line briefly in the previous session. The exchange-traded SPDR Gold Trust (GLD) gained 0.1%.

The ICE U.S. Dollar Index was up 0.2% at 93.07. It shed 1% last week to push its loss for 2017 to more than 9%, but gold still logged a roughly 0.7% weekly decline. Gold and the dollar typically trade inversely as moves in the U.S. unit can influence the attractiveness of commodities to holders of other currencies.

Read:Want to protect your stock-market gains? Consider these options, including gold (http://www.marketwatch.com/ story/want-to-protect-your-stock-market-gainsconsider-these-options-2017-11-22)

The Senate Banking Committee is scheduled to meet at Tuesday morning to hear testimony from Powell, in a hearing that will offer the first major clue to how a Powell-led Fed would conduct monetary policy and its other responsibilities.

See:Meet the next Fed boss. Same as the old boss? Jerome Powell to face Senate glare (http://www.marketwatch.com/ story/meet-the-next-fed-boss-same-as-the-old-boss-jerome-powell-to-face-senate-glare-2017-11-26)

(http://www.marketwatch.com/story/meet-the-next-fed-boss-same-as-the-old-boss-jerome-powell-to-face-senate-glare- 2017-11-26)The chairman-designate's opening statement was released late Monday (http://www.marketwatch.com/story/powell- to-testify-fed-will-continue-to-hike-interest-rates-shrink-the-balance-sheet-2017-11-27), with Powell saying he would stay the course laid out by Yellen to continue raising interest rates while allowing the balance sheet to gradually shrink. Powell is expected to easily win Senate confirmation. Yellen's term as chairwoman ends in February.

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding nonyielding bullion.

Gold held its narrow gain after data revealed a surge in the U.S. trade deficit in October (http:// www.marketwatch.com/story/us-trade-deficit-surges-in-october-advanced-report-shows-2017-11-28), which will tug on the fourth-quarter GDP performance. A separate report revealed that housing prices rose at their fastest pace since June 2014 (http://www.marketwatch.com/story/house-prices-rise-at-fastest-pace-since-june-2014-case-shiller-says-2017-11-28).

See:MarketWatch Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

(http://www.marketwatch.com/economy-politics/calendars/economic)"February gold futures bulls have the slight overall near-term technical advantage," said Wyckoff. Bulls' next upside technical objective is t $1,325.00. Bears' next near- term downside price breakout objective is a close below the October low of $1,267.00, he said.

December silver rose just shy of 2 cents, or 0.1%, to $17.035 an ounce. The exchange-traded iShares Silver Trust (SLV) rose 0.1%.

Elsewhere on Comex, December copper fell 1.7% to $3.0825 a pound, while January platinum rose 0.6% to $956.40 an ounce. December palladium tacked on 0.3% to $1,003.00 an ounce.

-Rachel Koning Beals; 415-439-6400; AskNewswires@dowjones.com

(END) Dow Jones Newswires
Copyright (c) 2017 Dow Jones & Company, Inc.

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