Gold extended its losses for the second day in a row as the Dollar gained strength ahead of the Federal Reserve Chair Janet Yellen’s speech on the interest rate outlook later today. Yellen will address at the Economic Club of New York during the later part of the day.
Yellow metal awaits Yellen comments
Many Fed officials have already hinted at the potential interest rate hike last week, which saw SPDR Gold Trust (ETF) (NYSEARCA:GLD) prices shedding as much as 3% of their gains. The yellow metal is regarded as highly sensitive to the U.S. monetary policy as any interest rate hike will firm up the dollar, making dollar-denominated gold highly expensive.
Gold Futures Contracts for June Delivery fell 0.14% to $1,220.30 during the early European hours. According to Naeem Aslam, chief market analyst at Ava Trade, the next support level of gold is at $1,179. He said that any hawkish tone in Yellen’s speech or an uptick in non-farm payrolls could send the gold prices down to this support level. But, gold still retains its position as the best performing asset for the year as Fed’s cautious approach towards monetary tightening has strongly supported the metal till now.
Meanwhile, both Franco-Nevada Corporation (NYSE:FNV) and Agnico Eagle Mines Ltd (USA) (NYSE:AEM) received a downgraded rating from the research firm, UBS. Franco-Nevada’s rating outlook has been revised to Neutral from Buy while Agnico also received similar rating revision.
On the other hand, things turned out positive for Gold Fields Limited (ADR) (NYSE:GFI) after it won an appeal in native title proceedings in Australia. The Federal Court of Australia held that the company’s re-granted tenements at St Ives mine conform to the Native Title Act. The ruling further established that the rights of St Ives’ as tenement holder and native title rights of Ngadju People will co-exist. While at times of inconsistencies, the rights of St Ives shall prevail.