On Wednesday, gold prices were hardly affected by the recent missile launch North Korea conducted.
Investors shrugged off the event and instead looked ahead into the comments from the head of the Federal Reserve. A batch of U.S. economic data for fresh clues on the likely trajectory of monetary policy is also awaited.
Comex gold futures traded at $1,295.71 per troy ounce by 3:15 A.M. ET (0815 GMT), which showed little difference from previous close. It reached its best level since the $1,299.00 position it held in October 16.
Investors found little information that could sway expectations for U.S. interest-rate policy during Federal Reserve Governor Jerome Powell’s Senate Banking Committee confirmation hearing. This in turn caused gold to gain slightly on Tuesday.
Pentagon stated that North Korea launched what seemed to be an intercontinental ballistic missile which landed in the Sea of Japan.
Pyongyang’s local media broadcasted that the country’s new ICBM is capable of reaching the U.S. But despite this, investors disregarded the news and caused gold to fail at drawing safe-haven support.
The launch follows U.S. classification of North Korea as a country that supports terrorism on November 20. This is the newest addition to Pyongyang’s missile launches this year which started on September 15.
The Rate Hikes
Outgoing Federal Reserve Chair Janet Yellen is scheduled to trstify on the economic outlook before the Congressional Joint Economic Committee that will transpire later in the day. The latter is thought to be able to offer market participants an insight into the progress of the economy.
Investors are predicted to carefully analyze Yellen’s remarks after she warned that the trend of low inflation hinders the potential of further rate hikes.
On December 12 to 13, the U.S. central bank is meant to conduct its final policy meeting of the year. It is highly expected for interest rate futures pricing to have a rate hike during the meeting.
Gold is extremely sensitive when it comes to rising rates, boosting the opportunity cost of having non-yielding assets like bullion, heightening the currency in which it is priced, the dollar.
Other metals had differing outputs too. Silver futures rose 0.1 percent at 2.0 cents to $16.84 per troy ounce. Platinum gained 0.1 percent to $954.15. Lastly, palladium fell by 0.1 percent at $1,019.48 per ounce.
Copper futures on the other hand declined 0.3 percent at 0.8 cents to $3.096 per pound.
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