By Paul Ploumis (ScrapMonster Author)

March 30, 2016 03:03:20 AM

(Kitco News) - Gold prices shot solidly higher and to the daily high in midday trading Tuesday, in the immediate aftermath of the release of prepared remarks from Federal Reserve Chair Janet Yellen's speech to the Economic Club of New York. The marketplace is deeming Yellen's comments as fully dovish on U.S. monetary policy. Respected CNBC economist Larry Kudlow termed Yellen’s comments as “very dovish.” June Comex gold was last up $17.20 an ounce at $1,239.00. May silver was last up $0.08 at $15.27.

The U.S. dollar index weakened significantly in the wake of Yellen's comments, which is also a bullish development for the precious metals markets. In her speech in New York, Yellen said the U.S. economic growth pace has weakened a bit and the pace of interest rate increases by the Fed will be only gradual. She said global developments and slow world economic growth also pose ongoing risks for the U.S. economy. Yellen also said the FOMC is not on a preset course of monetary policy tightening. Just recently, many market watchers were thinking the Fed might raise interest rates as soon as next month. However, Yellen’s remarks Tuesday threw cold water on that notion.

Gold prices were modestly weaker in overnight trading and then moved to modestly higher levels before Yellen’s comments hit the newswires and gave the yellow metal a big boost. Short covering and bargain hunting were featured in the gold market Tuesday, following the recent selling pressure that took prices to a five-week low on Monday.

Asian stock markets were mixed overnight, while European stock markets were firmer. U.S. stock indexes were higher in afternoon dealings Tuesday and also rallied on Yellen’s comments.

The next focus for traders and investors will be Friday’s U.S. jobs report, which is arguably the most important economic report of the month.

Courtesy: Kitco News