Gold prices rebound in Asia trade after overnight U.S. slump
Shanghai (Mar 25) Gold prices rebounded in Asia on Tuesday after falling overnight on prospects of a hike in interest rates by the U.S.Federal Reserve as early as 2015, which supports the dollar.
On the Comex division of the New York Mercantile Exchange, gold for June delivery traded at $1,313.90 a troy ounce, up 0.21%, after hitting an overnight session low of $1,308.60 and off a high of $1,335.60.
Gold continued to slump after Federal Reserve Chairwoman Janet Yellen suggested at a press conference last week that interest rates could rise six months after the Fed's bond-buying program ends, which is widely seen taking place this fall.
Fed asset purchases, currently set at $55 billion a month, aim to stimulate the economy by suppressing interest rates, weakening the dollar as long as they remain in effect and making gold an attractive hedge.
Gold and the greenback tend to trade inversely with one another.
Yellen's comments left many expecting benchmark interest rates to begin rising around the first half of 2015, and gold slumped on concerns that past and present rounds of Fed bond purchases beginning in late 2008 will soon become history, while an era of tighter monetary policy grows closer on the horizon.
Meanwhile, silver for May delivery was down 0.23% at US$20.020 a troy ounce, while copper futures for May delivery were up 1.02% at US$2.970 a pound.