Gold continued higher Thursday, building on gains scored a day earlier as remarks by Federal Reserve Chairman Jerome Powell were seen signaling a rate cut remains likely at the end of the month.
Powell’s dovish tone sent the U.S. dollar lower and it remains weaker on Thursday. The ICE U.S. Dollar Index DXY, -0.30% a measure of the currency against a basket of six major rivals, fell 0.2% Thursday to 96.885 and is down 0.4% so far this week. A weaker dollar can be a positive to commodities priced in the greenback as it makes them less expensive to users of other currencies.
“Gold surged past the $1,400 mark thanks to the softer [U.S. dollar] as the inverse relationship between the two markets continues to be strong. Gold remains in its bullish trend, and it might look to retest the $1,439 region,” said David Madden, market analyst at CMC, in a note.
Powell will testify on Capitol Hill for a second day on Thursday, appearing before the Senate Banking Committee at 10 a.m. Eastern.
September copper HGU19, -0.04% was off 0.6 cent, or 0.2%, at $2.688 a pound.