Gold recaptured the $1,200-an-ounce level on Wednesday as investors got more comfortable with the view that testimony from Federal Reserve Chairwoman Janet Yellen was not an outright negative for precious metals. Upbeat data from China also gave several precious and base metals a boost across the board. In electronic trading, gold for April delivery GCJ5, +0.86% rose $11.80, or 1%, to $1,209.20 an ounce, while March silver SIH5, +1.71% rose 30 cents, or 1.9%, to $16.49 an ounce. Gold dropped to an intraday low on Tuesday after Yellen's prepared remarks — read as hawkish — hit the market. Gold then recovered much of that sharp slide, though it still suffered a third straight session of losses, settling down about $3.50 to $1,197.30 an ounce on Tuesday. Yellen used her testimony to ready investors for the elimination of the word "patient" from the Fed's forward guidance in its policy statement. She stressed this change wouldn't mean a rate hike was coming within two meetings, but rather that Fed officials want to be able to decide whether to raise rates on a meeting-by-meeting basis. "However, as she explained more, the initial sell-off took a breather. Her overall comments were positive, and focus will be mainly on the inflation data, and any uptick in this is going to make the Fed very aggressive," said Naeem Aslam, chief market analyst at Ava Trade, in a note. "So the question which many gold investors are facing is, if [they [the Fed] are going to aggressively increase the rates which could be disastrous for the economy and a positive news for gold, or if they are going to take a gradual approach in raising the interest rate," he said. Higher interest rates are bearish for gold, as it doesn't provide a yield. Yellen will again be giving testimony on Wednesday. Markets were also taking in the latest reading from the preliminary HSBC China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity. The index rose to 50.1 in February, compared with a final reading of 49.7 in January, and that new reading shows marginal improvement in the sector. That Chinese data came in weaker than expected in January, its first dip below 50 since September 2012. As China is a big user of commodities, the market can be sensitive to growth data from the country. March copper HGH5, -0.43% eased back 2 cents to $2.63 a pound. April platinum PLJ5, +0.63% rose $9.70, or 0.8%, to $1,172.30 an ounce, while March palladium PAH5, +1.64% gained $12, or 1.5%, to $802 an ounce. Source: MarketWatch
