Gold Prices Decline to Lowest Level

Prices of gold dropped to its lowest in nearly eight weeks after US Central Bank head Janet Yellen said she was certain about the country’s economic growth and seemed to tone down expectations of a looming rate increase.

Gold for settlement in April slid to $3.50 (0.3 percent) or $1,197.30 per troy ounce at the New York Mercantile Exchange. This was the lowest settlement dating back to January 2.

Prices were unstable after the statement of the Fed chair and reached a high of $1,204.40 per ounce before falling. According to Yellen, employment was gaining in the US and the central bank can take into account an increase within the target range for federal fund rates on a per-meeting basis if economic growth persists.

Higher rates can be adverse news for gold which competes with other profit-generating investments in times of contracting monetary policy.

Gold prices remain down around eight percent since January 22 as demand for the precious metal has been reduced considerably. Platinum is also lower with April settlement down 30 cents ($1,162.60 per troy ounce). This is the lowest for the most actively-traded contract since July of 2009.

The Fed chair underscored overseas risks which include sluggish development in the EU and China.

The next policy meeting of the central bank is scheduled for March 17 and 18 and market investors are positive that rate increases will finally take effect.  

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