Gold Unchanged as Investors Await Slew of Fed Speakers

December Comex Gold futures are trading unchanged at $1145.60. Volume and volatility are both below average and the market is trading inside Friday’s tight range as well as Thursday’s wide range. The lack of fresh economic news is helping to hold the market in a range.

Earlier in the session, the National Statistics Bureau announced that Chinese industrial profits declined 8.8 percent in August, worse than July’s 2.9 percent fall. For the first eight months of the year, profits slid an annual 1.9 percent. This news had very little impact on gold prices and the U.S. Dollar.

Traders are content to hold the market in a tight range ahead of a number of Fed member speeches later today. U.S. interest rates and the U.S. Dollar are the main focus for traders. The market is starving for fresh guidance as to the timing of the next Fed rate hike. Hawkish commentary will be bullish for the U.S. Dollar and bearish for gold prices.

Gold prices retreated on Friday after a surge to its highest level since August 24 the previous day. The catalyst for the selling pressure was hawkish comments from Fed Chair Janet Yellen. She said she personally anticipates an interest rate hike this year.

In a speech at the University of Massachusetts, Yellen built a case for raising short-term interest rates later this year. She essentially argued that the slack in the economy has diminished to a point where inflation pressures should start to gradually build in the coming years. Although these pressures aren’t evident yet, because a strong dollar and falling oil and import prices are placing temporary pressure on consumer prices. As those issue subside, she predicted, inflation will gradually rise.

It is the Fed’s job to get in front of these headwinds, she said, and also prevent speculative forces in financial markets that could lead to “inappropriate risk-taking that might undermine financial stability.”

“It will likely be appropriate to raise the target range of the federal funds rate sometime later this year and to continue boosting short-term rates at a gradual pace thereafter as the labor market improves further and inflation moves back to our 2% objective,” Yellen said.

Today’s U.S. session could see increased volatility because several Fed members are on-tap to deliver speeches. Governor Daniel Tarullo, president of Federal Reserve Bank of New York and vice-chairman of the Federal Open Market Committee William C. Dudley, Chicago Fed President Charles Evans and San Francisco Fed President John Williams will hopefully shed some light on the timing of the next Fed rate hike.