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Gold up on technical trading despite Yellen comments

Xinhua, August 27, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on technical trading Friday despite the U.S. Fed Chair taking a hawkish tone.

The most active gold contract for December delivery rose 1.3 U.S. dollars, or 0.1 percent, to settle at 1,325.9 dollars per ounce.

Highly volatile technical trading led to an increase in the price of gold after U.S. Federal Reserve Chairwoman Janet Yellen indicated on Friday that she believes the case for an increase in the U.S. Fed's interest rate has strengthened in recent months during a speech in Jackson, in the U.S. state of Wyoming.

After Yellen indicated that she would be open a rate hike as early as next month, traders now believe that the Fed may raise rates from 0.50 to 0.75 during the November Federal Open Market Committee meeting (FOMC) meeting instead of the December FOMC meeting.

According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 36 percent at the September 2016 meeting, 61 percent at the November 2016 meeting, and 38 percent at the December meeting.

Strength in the U.S. dollar prevented the precious metal from rallying further as the U.S. Dollar Index rose by 0.87 percent to 95.54 as of 1845 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

Silver for September delivery rose 16.2 cents, or 0.88 percent, to close at 18.651 dollars per ounce. Platinum for October delivery added 0.7 dollars, or 0.06 percent, to close at 1,077.7 dollars per ounce. Endit