Metals Stocks: Gold prices finish higher as U.S. dollar steadies after Powell’s remarks

Tuesday’s rise for gold marked a second straight gain for the yellow metal, as prices recouped some of what they lost in the sharp fall on Friday, after the January U.S. employment report was published.

Price action

• Gold for April
  GC00,
  +0.10%

  GCJ23,
  +0.10%
  delivery rose $5.30, or 0.3%, to settle at $1,884.80 per ounce on Comex.

• Silver for March delivery
  SI00,
  -0.46%

  SIH23,
  -0.46%
  fell 6 cents, or 0.3%, to $22.177 per ounce.

• March palladium
  PAH23,
  +3.49%
  climbed by $62.10, or 3.9%, to $1,641.50 per ounce, while April platinum
  PLJ23,
  +0.44%
  added $11.60, or 1.2%, to $986.20 per ounce.

• March copper
  HGH23,
  +0.57%
  settled at $4.0805 per pound, up 1.1%.

Market drivers

Powell said in an interview Tuesday in Washington that the Fed will “need to do further rate increases,” and that it will “need to hold policy at a restrictive level for a period of time.”

Against that backdrop, the U.S. dollar weakened a bit, with the ICE U.S. Dollar index
DXY,
-0.11%
down 0.1% at 103.52, down from an earlier high of 103.96. The index saw gains in each of the last three sessions, FactSet data show. Weakness in the dollar can make gold, which is priced in the U.S. currency, more attractive to buyers.

Powell’s remarks were the first since Friday’s stronger-than-expected U.S. jobs report and last week’s Fed policy meeting, when he surprised investors by refusing to push back against the loosening of financial conditions in recent months.

Several other senior Fed officials said this week that the central bank needs to raise interest rates higher to hep subdue inflation after the strong January jobs report. After the Fed raised its policy interest rate last week, Powell said the Fed was only likely to do so a “couple more times.”

Near term, gold and silver are “likely to remain traders’ markets, punctuated by spikes and troughs as consumers acclimatize to these higher levels and U.S. data either confirm or refute hopes for a turnaround in Fed policy,” said Adrian Ash, director of research at BullionVault, ahead of Powell’s remarks.