Commodities: Gold prices drop to two-month low

Gold prices fell to a two-month low on Tuesday as increased investor risk appetite benefitted equities after Federal Reserve chair Janet Yellen lowered expectations for a rate increase any time soon. Gold futures for April delivery receded 0.3% to $1,200.80 an ounce.

Meanwhile, Brent futures fell 0.5% to $58.62 at the end of Tuesday’s session, while ICE WTI futures increased 0.3% to $49.25.

CMC Markets analyst Jasper Lawler noted: “After claiming that the oil prices will be a big plus, Yellen reiterated the fact that the Fed won’t act until they have confidence that US inflation is on its way to the targeted 2%.”

IG analyst Chris Beauchamp said: “Yellen’s testimony was the opportunity oil bulls needed to reverse the morning’s losses but in the longer term the fundamental picture will reassert itself.

“Gold and silver failed to make much headway following Yellen’s testimony - she may be more dovish than expected but there is no mention of a return to easing, leaving gold marooned below $1,200.”

Over on LME, three-month copper futures rose 0.6% to $5,818.00 a tonne.