Gold prices moved higher on Wednesday and lifted the most active gold futures contract to their highest close in a weak, as the dollar lost ground against its peers.
Federal Reserve Chairman Jerome Powell’s reiteration that the central bank will continue with its accommodative policy and an interest rate hike would not happen anytime soon weighed on the dollar.
“We will not raise interest rates pre-emptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances,” Powell said in a hearing before the House Select Subcommittee on the Coronavirus Crisis on Tuesday.
The dollar index dropped to a low of 91.51 in mid-morning trades but recovered gradually to emerge above the flat line about an hour past noon. It was last seen hovering around 91.75.
Gold futures for August ended up by $6.00 or about 0.3% at $1,783.40 an ounce, the highest close since last Wednesday (June 16). Gold futures rose to a high of $1,795.60 an ounce before paring some gains.
Silver futures for July ended higher by $0.254 or 1% at $26.111 an ounce, while Copper futures for July settled at $4.3305 per pound, up $0.1005 or 2.4% from the previous close.
In U.S. economic news today, a report released by the Commerce Department showed another steep drop in new home sales in the U.S. in the month of May.
The Commerce Department said new home sales tumbled by 5.9% to an annual rate of 769,000 in May after plunging by 7.8% to a downwardly revised rate of 817,000 in April.
The continued decrease surprised economists, who had expected new home sales to climb 0.8% to a rate of 870,000 from the 863,000 originally reported for the previous month.
With the continued nosedive, new home sales fell to their lowest annual rate since hitting 704,000 in May of last year.
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