Gold futures fell, capping the longest slump this year, after Federal Reserve Chair Janet Yellen failed to allay concerns that U.S. interest rates will rise, eroding the appeal of the precious metal as an alternative asset.
Yellen signaled that a change in the Fed™s guidance on interest rates won™t lock it into a timetable for tightening, according to testimony prepared for delivery before the Senate Banking Committee. Gold extended a slump to a seven-week low.
Gold futures for April delivery fell 0.3 percent to settle at $1,197.30 an ounce at 2:03 p.m. on the Comex in New York. The price dropped for the third straight session, the longest slump since Dec. 24. Earlier, the metal touched $1,190, the lowest for a most-active contract since Jan. 5.
Yellen testified in the Senate on Tuesday and is set to appear before the House of Representatives Wednesday. Richmond Fed President Jeffrey Lacker was cited by Market News International as saying the central bank may raise rates in June or April. Higher rates curb gold™s appeal because the metal generally gives returns only through price gains.