Yellen: Not going anywhere when Trump takes over

(Kitco News) – Gold prices are holding on to gains Thursday morning despite comments from Federal Reserve Chair Janet Yellen that supports an interest-rate hike in December.

The market bellwether S&P 500 closed up 0.5% at 2187 – just shy of the 2190 record high struck in mid-August.

In US data released Thursday, the CPI came in as expected at 0.4% while the core CPI undershot at 0.1%. But with rents pushing higher, that trend is unlikely to be sustained.

In economic data, USA initial jobless claims plunged last week to their lowest level in 43 years, the Labor Department said on Thursday.

Oil refining company Tesoro will buy Western Refining for 37.30 dollars a share in stock, a deal the companies valued at 4.1 billion dollars.

With this type of speculation, the Dow remained flat, only being led by the Nasdaq heading into the close up 0.5%. The Russell 2000 jumped 0.6 percent to a record, while the Dow Average gained 0.2 percent.

USA stocks rose Thursday as banks resumed their steep upward climb and retailers moved higher.

Further employment gains could help push the participation rate up further and help boost wages, she said. That cancelled out a strong first-quarter report. The Nasdaq composite added 39.39 points, or 0.7%, to 5,333.97.

The dollar was gunning for robust weekly gains on Friday, which accelerated after Federal Reserve Chair Janet Yellen provided a strong signal that US interest rates will likely increase by year-end. But could is all it is.

MARKET INSIGHT: “The greatest uncertainties, namely the election and the Fed rate hike, were significantly reduced over the last two weeks, which gave the market a good reason to refocus on the fundamentals of economic and corporate earnings”, said Margaret Yang, an analyst at CMC Markets.

Ms Yellen said she continues to expect the evolution of the economy will warrant only gradual increases in short-term rates over time, in part because the so-called neutral rate of interest – the rate at which the economy is operating at its full potential without overheating – appears to be quite low.

In the course of her testimony, Yellen also indicated that even in the wake of last week’s unexpected election results, the economic indicators that the Fed’s Open Market Committee consults when determining appropriate target interest rates were not dramatically different.

Two other Fed officials speak Thursday. New York Fed President William Dudley made welcoming remarks at a forum at the New York Fed, while Federal Reserve Governor Lael Brainard speaks at 12:30 ET (1730 GMT) at the forum.

“Sometimes central banks need to do things that are not immediately popular for the health of the economy”.

At 10.24 pm, while BSE Sensex was down 0.17 percent at 26,180.78, 50-share index Nifty was trading at 8,066.65, down 0.16 percent.

Overnight in USA markets, the Dow Jones Industrial Average rose 36 points, or 0.2 per cent, to 18,904.

Rising yields also reflected market players’ reassessment of the Fed’s policy path down the road, beyond a likely rate hike in its Dec 13-14 meeting.

Throughout the presidential election, now-President-elect Donald Trump has vowed to undo the financial service industry reforms contained in the Dodd-Frank Act.