By Chris Prentice and Maytaal Angel
NEW YORK/LONDON (Reuters) - Gold retreated from earlier gains on Thursday as the U.S. dollar turned higher and global stocks gained on upbeat data, even as investors wagered that policy tightening in the United States would be glacial at best.
Denting gold's safe-haven appeal, the MSCI world index hit a record high for the fourth time in less than a month as investors took Yellen's remarks as a green light for risk-taking. [MKTS/GLOB]
China posted stronger-than-expected June trade figures, bolstering the U.S. dollar, which advanced against a currency basket <.DXY>.
The greenback earlier hit its lowest since last October after U.S. Federal Reserve Chair Janet Yellen struck a less hawkish than expected tone in testimony before Congress on Wednesday. [FRX/]
A stronger U.S. currency weighs on gold, making the dollar-priced commodity more expensive for non-U.S. investors. [FRX/]
U.S. gold futures for August delivery
The U.S. economy is healthy enough for the Fed to raise interest rates, though low inflation and a low neutral rate could leave the central bank with diminished leeway, Yellen said on Wednesday.
"Without inflation pressure, Yellen won't likely do anything until 2018. The gold market can take a breather," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago.
"The $1,200 (per ounce) level is good support, but it could be tested," he said.
The comments, part of Yellen's two-day monetary policy testimony, prompted a rally in treasuries, with yields on two-year notes
"The consolidation around $1,220 should be viewed as positive for near-term pricing, with the relatively light long positioning instilling confidence in the market that the metal is open to further top-side moves," MKS said in a note.
"Geopolitical concerns out of the Korean peninsula are likely to supportive for the broader precious complex, while the very fluid Trump-Russia collusion story continues to create uncertainty across markets."
"(T)he gold/silver ratio is approaching 80, meaning that silver is very inexpensive compared with gold," said Gregor Gregersen at Singapore-based Silver Bullion Pte.
(Additional reporting by Nithin Prasad and Arpan Varghese; Editing by Marguerita Choy)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)