PRECIOUS-Gold gains as Fed Chair Powell defends loose monetary policy

PRECIOUS-Gold gains as Fed Chair Powell defends loose monetary policy

Reuters  | Feb 24, 2021 02:48

PRECIOUS-Gold gains as Fed Chair Powell defends loose monetary policy

Feb 24 (Reuters) - Gold prices inched higher on Wednesday as
Federal Reserve Chair Jerome Powell said the central bank would
keep monetary policy accommodative as the U.S. economy still
needed support.

* Spot gold XAU= rose 0.2% to $1,809.17 per ounce by 0111
GMT, having hit its highest since Feb. 16 at $1,815.63 on
Tuesday. U.S. gold futures GCv1 gained 0.1% to $1,807.30.
* Powell in his testimony before the U.S. Senate Banking
Committee pushed back on suggestions that loose monetary policy
risked unleashing inflation and financial risks in what may be
an emerging economic boom. * The benchmark 10-year U.S. Treasury yield US10YT=RR fell
on Tuesday after Powell's comments. Easy monetary policy tends
to weigh on government bond yields, increasing the appeal of
non-yielding gold. US/
* The dollar .DXY eased against rivals, making gold
cheaper for holders of other currencies. USD/
* Short-dated U.S. Treasury debt yields risk turning
negative as the U.S. government curbs sales of Treasury bills,
but analysts are looking at the progress of the stimulus bill to
assess whether any dip in yields could be a temporary
issue. * More expensive services and industrial goods led a rebound
in euro zone inflation in January after months of falling
prices, data showed on Tuesday. * COVID-19 vaccine makers told Congress on Tuesday that U.S.
supplies should surge in the coming weeks due to manufacturing
expansions and new vaccine authorizations. * SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.4% to 1,110.44
tonnes on Tuesday from 1,115.4 tonnes on Monday. * Silver XAG= rose 0.4% to $27.73 an ounce. Platinum
XPT= climbed 1.4% to $1,253.76, while palladium XPD= added
0.4% to $2,360.69.

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