COMODOTIES-GOLD

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COMODOTIES-GOLD

© Reuters. Gold up in Asia

Gold prices shrugged off a mildly hawkish views on the prospect for interest rate hikes by the Fed Chief and rose in Asia on Thursday with investors looking to sharper policy guidelines from President-elect Donald Trump in his inaugural address at the end of the week.

Gold for February delivery on the Comex division of the New York Mercantile Exchange dropped 0.93% at $1,200.85 a troy ounce, while silver futures for March delivery fell 1.57% to $17.002 a troy ounce and copper futures rose 0.73% to $2.633 a pound.

Late Wednesday in the U.S., Fed Chair Janet Yellen said she sees rate hikes "a few times a year" as the economy continues to recover until it reached the neutral rate which she expects by the end of 2019. "As the economy approaches our objectives, it makes sense to gradually reduce the level of monetary policy support," Yellen said in a speech prepared for the Commonwealth Club in San Francisco, adding "changes in monetary policy take time to work their way into the economy."

Overnight, gold prices steadied below the prior session's eight-week high on Wednesday, as investors awaited a speech from Federal Reserve Chair Janet Yellen for fresh clues about the timing of the next rate hike.

Prices of the yellow metal rallied to $1,218.90 on Tuesday, a level not seen since November 22, as the U.S. dollar plunged after Trump warned that the greenback was “too strong” in an interview with the Wall Street Journal.

Global financial markets will continue to focus on Trump as he takes the Oath of Office and offers his inaugural address on Friday. Investors will welcome any detail he may give on his promises of tax reform, infrastructure spending and deregulation, as well as insight regarding policies on China and the domestic economy.

Trump has been credited with being a major catalyst behind the market's impressive rally since election day, although he has yet to outline his economic policies in detail.

The Fed had indicated in December that at least three rate increases were in the offing for 2017, according to a forecast of interest rates from members of the central bank, known as the dot-plot.

However, traders remained unconvinced. Instead, markets are pricing in just two rate hikes during the course of this year, according to Investing.com’s Fed Rate Monitor Tool.

A delay in raising interest rates would be seen as positive for gold, a non-interest-bearing asset, and negative for the dollar. On the data front, U.S. Commerce Department said that consumer prices gained 0.3% in December, in line with expectations and after a 0.2% advance the previous month.

Year-over-year, consumer prices increased 2.1% last month, the biggest year-on-year gain since June 2014, a sign that inflation pressures could be building.