By Tatyana Shumsky
NEW YORK--Gold prices rose Friday as investors continued to
weigh the timing of a potential increase in U.S. interest
rates.
The most actively traded contract, for April delivery, was
recently up $5.10, or 0.4%, at $1,215.20 a troy ounce on the Comex
division of the New York Mercantile Exchange.
Prices have moved higher in recent days, after Federal Reserve
Chairwoman Janet Yellen told lawmakers that the central bank is
closer to raising interest rates, but that such a move remains
dependent on U.S. economic data. Ms. Yellen, in testimony to
Congress on Tuesday and Wednesday, said wage growth and inflation
must climb before rates can be raised, even though the labor market
has shown signs of improvement.
"The continued indication that the Fed's not going to be quick
to move has put a bid back into the market, but that will evaporate
the moment that sentiment changes," said Frank McGhee, head
precious metals dealer with Integrated Brokerage Services LLC in
Chicago.
Gold doesn't earn interest or dividends and is expected to
struggle to attract investors away from haven assets like Treasury
bonds when rates are climbing.
Gold traders also breathed a little easier after German
lawmakers approved a four-month extension of Greece's bailout in a
vote in the lower house of parliament on Friday.
"It means that some of the Greek banks won't have to sell gold
to raise cash," said George Gero, a senior vice president with RBC
Capital Markets Global Futures. Some investors worried that without
the extension, Greek banks would be cut off from borrowing funds
from the European Central Bank and would instead sell their gold
holdings, Mr. Gero said.
Write to Tatyana Shumsky at tatyana.shumsky@wsj.com