Gold stays below $1300/oz as dollar rises after hawkish Yellen comments

A Peek Into The Markets: US Stock Futures Edge Lower Ahead Of Fed Speakers

The New Zealand dollar fell against the USA dollar, touching a three-week low, after Federal Reserve chair Janet Yellen said the central bank needs to push on with gradual rate hikes despite weak inflation. The Nasdaq Composite Index gained 9.57 points, or 0.15 percent, to 6,380.16.

"In response, the Federal Reserve will likely continue to remove monetary policy accommodation gradually", added Dudley, a close ally of Fed Chair Janet Yellen and a permanent voter on monetary policy. As the figure shows, based on that history, there is a 30 percent probability that inflation could be greater than 3 percent or less than 1 percent next year.

The euro fell to a five-week low following the steepest drop of the year on Monday after U.K. Prime Minister Theresa May's comments on Brexit negotiations.

Ellen Zentner, chief economist at Morgan Stanley, says her biggest takeaway from the Cleveland speech was Yellen's confidence that "a strong USA labor market would ultimately drive inflation closer to the Fed's two percent goal over the next few years". A weaker currency is a boon to exporters.

The percentage of companies planning wage increases "has moved back up to its pre-recession level, many firms report difficulties in finding qualified workers, and some have responded by expanding training programs and offering signing bonuses - possible harbingers of stronger wage gains to come", Yellen said. The yen fell 0.5 percent to 112.82 per dollar and sterling lost 0.3 percent to $1.3420 against the resurgent greenback, picking up from as low as $1.3363.

In the oil space, Inpex is advancing nearly 1 percent and Japan Petroleum Exploration is rising 0.6 percent despite lower crude oil prices.

The index is a measure of the United States dollar against a basket of other major currencies. As I will discuss, this low inflation likely reflects factors whose influence should fade over time.

-U.S. data on durable-goods orders, GDP and personal spending later in the week will provide further clues as to the Fed's policy path.

Spot gold inched 0.1 percent higher to $1,294.89 per ounce at 0425 GMT. The dollar index had backed down a bit from its daily high as of this writing early Tuesday afternoon.

November West Texas Intermediate crude declined by 34 cents, or 0.7%, to settle at $51.88 a barrel on the New York Mercantile Exchange.