Gold, Copper Decline After Powell's Remarks on Rates Boost Dollar

Updated on
  • Recent volatility shouldn’t weigh on U.S. economy: Powell
  • Dollar rises for a second day, reducing appeal of commodities
Fed Chair Jerome Powell will tell Congress he sees interest rates rising gradually. Bloomberg’s Mike McKee reports.

Gold and copper futures fell as the dollar was buoyed by a statement from Federal Reserve Chairman Jerome Powell that signaled U.S. policy makers will keep on gradually raising interest rates, undeterred by recent market fluctuations.

“Despite the recent volatility, financial conditions remain accommodative,” Powell said in written testimony to the House Financial Services Committee on Tuesday in Washington. “Some of the headwinds the U.S. economy faced in previous years have turned into tailwinds: In particular, fiscal policy has become more stimulative and foreign demand for U.S. exports is on a firmer trajectory.”

“The wild swings have not altered Fed policy going forward,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “They’re comfortable with that volatility and that’s why the dollar is showing strength, and it’s weighing on most markets across the board” including gold, he said.  

  • The Bloomberg Dollar Spot Index rose a second day, reducing the appeal of commodities as an alternative investment
  • Bullion futures for April delivery slid 1.1 percent to settle at $1,318.60 an ounce at 1:36 p.m. on the Comex in New York
  • Copper futures for May delivery declined 1.2 percent to $3.1865 a pound on the Comex
  • Silver futures also fell on the Comex, while platinum and palladium futures declined on the New York Mercantile Exchange
  • On the London Metal Exchange, copper, zinc, nickel and lead slipped, while aluminum and tin rose
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