Gold receives a slight boost amid Janet Yellen remarks

After Federal Reserve Chair nominee Janet Yellen delivered testimony to Congress on Thursday, gold prices inched higher as she hinted at further tools to stimulate the United States economy. In other words, an increase in quantitative easing and further inflation will remain in the central bank’s arsenal.

During the Thursday afternoon trading session, gold was up nearly 1.5 percent at $1,286.50. The reason why gold usually receives a boost after a Fed statement is because the $85 billion per month bond-buying initiative weakens the U.S. dollar and thus gold acts as a hedge against debasement.

Here is what Yellen had to say when asked about her policy hurting savers:

“But you know, if we want to get back to business as usual and a normal monetary policy and normal interest rates, I would say we need to do that by getting the economy back to normal,” Yellen said in response to a question posted by Nebraska Republican Senator Mike Johanns.

The U.S. dollar’s value also weakened after Yellen’s comments due to the uncertainty over its tapering endeavors. She noted that the central bank wants to be absolutely sure the economy is sound before taking the foot off the pedal. However, even if the taper begins early next year, monetary tightening is not expected to transpire for quite some time.

Silver, meanwhile, is trading close to $21 per ounce.

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