US Stocks Finish Flat as Yellen Hints at Interest Rate Hike

Reuters

USA gold futures for December delivery settled down $13.90, or 1.07 percent, at $1,287.80 per ounce.

In Europe, markets edged higher on merger news and also on hopes of monetary policy tightening in the U.S.

"It would be imprudent to keep monetary policy on hold until inflation is back to two percent", Fed Chair Janet Yellen said Tuesday, while speaking to the National Association for Business Economists (NABE) in Cleveland, Ohio.

The euro bottomed to a near 6-week low of $1.1723 as political stability is put to question in Germany after Sunday's federal elections and as the dollar continued strengthening.

Speculators' net short bets on the USA dollar grew in the latest week to the highest total since January 2013.

US POLITICS WATCH: House Republicans and the Trump administration officials are due to give details of the plans for a long-awaited tax proposal on Wednesday, which are expected to reduce individual and corporate tax rates.

United States stocks also gained on the speech, while USA president Trump's address due Wednesday detailing planned U.S. tax cuts, was also supportive.

The US dollar appreciated overnight following Federal Reserve Chairwoman Janet Yellen's hawkish tone on rates, prompting renewed suggestions that a December move (to increase rates) was on the cards.

USA gold futures for December delivery fell 0.3% to $1,297.80 per ounce.




"In my view, it strengthens the case for a gradual pace of adjustments", Yellen said.

"The current level of the policy rate is appropriate given current macroeconomic data", he said.

Comex December gold, at the session low of $1,285.30 an ounce, has lost almost 6% of its value since the one-year high of $1,362.40 on September 8. "The impact of a successfully implemented (tax overhaul) plan would be far-reaching with President Trump placing a key focus on bringing back funds from USA firms "parked overseas".

The dollar rose to a more than one-month high against a basket of currencies on Wednesday, as optimism about USA fiscal reforms boosted sentiment in favour of the greenback.

Strong U.S. data on durable goods orders also pressured gold, Melek said.

Dow e-minis were down 10 points, or 0.04 percent, with 22,892 contracts changing hands. The Standard & Poor's 500 index added 0.18 points to 2,496.84.

India's Sensex was declining 0.9 percent and benchmark indexes in Indonesia and Malaysia were down around 0.1 percent, while Singapore's Straits Times index was rising 0.9 percent and the Taiwan Weighted rose 0.7 percent.

-The euro sank 0.5 percent to $1.1792, the weakest in five weeks.

The dollar was higher against the yen, trading at 112.34. USA crude stocks were reduced by 761,000 barrels last week, the American Petroleum Institute announced on Tuesday.

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