Investing.com – Gold prices came under pressure on Wednesday as Treasury yields rose on hawkish comments from Fed chair Janet Yellen and upbeat economic data.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose by $11.76, or 0.71%, to $1282.24 a troy ounce.
Federal chair Janet Yellen testified on the economic outlook before the Congressional Joint Economic Committee on Wednesday, reaffirming that the Fed would continue to hike rates amid concerns of the economy overheating. Market participants took Yellen’s comments to be somewhat hawkish, prompting a surge in U.S. Treasury yields, lifting the dollar higher while pressuring gold prices to lows.
"We are not seeing undue inflationary pressure in the labor market, so our policy remains accommodative," Yellen said. "But we do think it's important to gradually move our policy rate toward what I'll call a neutral level, which would be consistent with sustainably strong labor market conditions," she said.
Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding non-yielding assets such as bullion.
Also weighing on gold prices was data indicating underlying strength in the U.S. economy as third quarter economic growth remained solid.
Gross domestic product increased at a 3.3% annual rate in the July-September period, the Commerce Department said in its second estimate of GDP on Wednesday, beating a previous estimate of 3%.
In other precious metal trade, silver futures fell 1.94% to $16.51 a troy ounce, while platinum futures lost 1.23% to $941.05.
Copper traded at $3.07, down 1.13%, while natural gas rose by 1.25% to $3.17.