Gold prices rose on Wednesday as mounting fears about a likely deep recession prompted traders to seek the safe haven asset.
The Federal Reserve Chief Jerome Powell almost ruled out prospects for negative interest rates, but said the central bank would use other measures to support the economy.
Powell said the outlook for the U.S. economy is “both highly uncertain and subject to significant downside risks” and added that the U.S. Congress may have to provide additional stimulus to try and prevent long-lasting economic damage.
The dollar index rose to 100.26, gaining more than 0.3% after the Fed Chief ruled out negative interest rates.
Gold futures for June ended up $9.60, or about 0.6%, at $1,716.40 an ounce, finishing above the $1,700 mark for a second successive day.
On Tuesday, gold futures for June ended up $8.80, or about 0.5%, at $1,706.80 an ounce.
Silver futures for July ended down $0.038, or about 0.2%, at $15.671 an ounce, while Copper futures for July settled at $2.3460 per pound, losing about 0.6%.
Meanwhile, the Labor Department’s report showed U.S. producer prices plunged by much more than expected in the month of April.
The report said the producer price index for final demand tumbled by 1.3% in April after edging down by 0.2% in March. Economists had expected prices to drop by 0.5%.
The bigger than expected decrease in producer prices came as energy prices nosedived by 19% in April after plummeting by 6.7% in March.
Excluding food and energy prices, core producer prices fell by a much more modest 0.3% in April after inching up by 0.2% in the previous month. Core prices were expected to be unchanged.