Trump’s Speech Effect

Gold prices fluctuated late Tuesday, ahead of the first speech of the U.S. President Donald Trump to the Congress.

Trump’s speech came disappointing to the market as he did not clarify or elaborate on his plans for tax reforms and infrastructure spending.

William Dudley, president of the New York Fed, said tightening monetary policy has become “a lot more compelling”, while San Francisco Fed President John Williams said he saw “no need to delay” raising rates.

Also, Robert Kaplan, president of the Dallas Fed, stated Monday that the US central bank may need to raise interest rates “sooner than later”.

Fed chair Janet Yellen is due to give a speech on Friday, too, with market’s anticipations of a March rate hike.

After those hawkish comments from the Federal Reserve officials, the dollar and the U.S. Treasury yields spiked on Wednesday.

The dollar index surged 0.7 percent to its highest level in seven weeks, also boosted by data showing robust U.S. economic consumer spending.

Two-year U.S. Treasury yields jumped to 1.304 percent, the highest since December, to match their highest levels since 2009. The gap between them and their German equivalents increased to its widest since 2000.

Spot gold price fell 0.2 percent to $1,244.86 an ounce, facing its third losing day in a row, after the precious metal reached its highest level since November 11, at $1,263.80 an ounce, on February 27.

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