Gold was weaker as US Federal Reserve chair Janet Yellen said little to suggest she was about to do a U-turn on its rate tightening strategy despite recent equity market turmoil.
Most economists expect rates to go up twice or maybe three times more this year, which should lift bond yields and the US dollar both of which are traditional counters to the metal.
Yellen told the House of Representatives Financial Services panel that conditions “have become less supportive to growth” but added the US economy could cope and grow at a moderate pace without much damage, or even “exceed our projections.”
It was a bit more cautious than previous comments, but not by enough to point to a change of heart at the Fed, said traders.
Shortly after US markets opened, spot gold was trading US$4 lower at US$1,185. Silver was a touch down at US$15.11 and platinum had shed US$7 to US$923.
Meanwhile, Citigroup has re-visited the gold and silver miners following the recent rise in the prices of both metals.
The US broker is sticking to its defensive line of going for miners with low-cost structures, net cash (or limited debt) and a disciplined approach to return on capital despite the surge in the gold price it .
Don’t be tempted into buying more highly geared riskier shares, it said, as it believes gold will encounter selling above $1,200.
Major share moves
Randgold Resources down 200p at 5,700p
Fresnillo down 25p at 829p
Anglo American down 6.5p 326.7p