Gold and oil prices were higher on Tuesday, as Fed Chair Janet Yellen’s testimony was in focus and OPEC-led cuts reduced supply.
Investors will be looking to Yellen’s testimony for indications of the pace of rate hikes in 2017.
Gold for April delivery was up 0.2%, or $2.55, to $1,228.35 per troy ounce overnight.
The yellow metal lost 0.8%, or $10.10, the previous day. Gold was trading at a one-week low of $1,220.30 on Monday, as investors flocked to stocks and the dollar on renewed optimism over Trump’s economic plan.
Yellen will give her monetary policy testimony before the Senate Banking Committee today and House Financial Services Committee on Wednesday.
The Fed Chair’s comments will be watched closely for clues on policy and the timing of interest rate hikes.
Earlier in the month, the Fed held rates and gave no indication of the timing of the next rate increase. The central bank has projected three rate hikes for the year, but markets are pricing in on just two increases for 2017.
In other metals news, platinum gained 0.1% to trade at $1,001.10, while copper futures climbed 0.4% to $2.795. Silver futures added 0.1% to trade at $17.84, while palladium was up 0.5% to $778.65.
Oil prices also gained on Tuesday, as OPEC-led cuts helped offset increased production elsewhere.
U.S. crude was up $0.44 to $53.38 per barrel, while Brent crude was up $0.55 to $56.14.
OPEC, Russia and other producers have agreed to cut back on output by nearly 1.8 million barrels per day for the first six months of 2017. The agreement is aimed at reducing the oil oversupply that has kept prices low.
The U.S. has partially offset efforts to reduce supply, as production has increased by 6.5% to 8.98 million barrels per day since mid-2016.
Thus far, compliance among OPEC countries has held firm at 90%, but investors fear that the output cuts may not be maintained.