Gold Settles Higher, Pushing $1,300

(RTTNews) - Gold futures ended higher for a sixth straight session on Wednesday, on some upbeat trade data from China even as investors continued to cheer the U.S. Federal Reserve Chairman Janet Yellen statement before the House Financial Services Committee on the economy. Yellen indicated continuing with gradual tapering of the monthly bond-buying program, with an overall accommodative policy.

China's trade surplus increased with export and import growth accelerating unexpectedly at the start of the year, defying expectations that the second largest economy in the world is set for a slowdown in early 2014.

The House of Representatives passed an extension to the U.S. government's debt limit Tuesday evening, avoiding a potential political standoff with the White House. The vote to raise the debt ceiling was 221 in favor and 201 against.

Meanwhile, St. Louis Federal Reserve Bank President James Bullard told Bloomberg TV that he expects the U.S. economy to become more normal by the end of the year, at which time the Fed could be near the end of its ultra-accommodative monetary policy.

Gold for April delivery, the most actively traded contract, gained $5.20 or 0.4 percent to close at $1,295.00 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for April delivery scaled an intraday high of $1,296.40 and a low of $1,283.90 an ounce.

Yesterday, gold ended at a near three-month high after comments from the U.S. Federal Reserve Chairman Janet Yellen, who indicated gradual tapering of the monthly bond-buying program, with an overall accommodative policy.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged up to 798.85 from 797.05 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.69 on Wednesday, up from its previous close of 80.62 late Tuesday in North American trade. The dollar scaled a high of 80.83 intraday and a low of 80.49.

The euro traded lower against the dollar at $1.3597 on Wednesday, as compared to its previous close of $1.3638 late Tuesday in North America. The euro scaled a high of $1.3652 intraday and a low of $1.3564.

In economic news, China's trade surplus increased to $31.9 billion in January from $25.6 billion a month ago, data from the General Administration of Customs showed Wednesday. Export shipments surged 10.6 percent in January from last year. Analysts expected exports to rise 0.1 percent after expanding 4.3 percent in December. Imports advanced 10 percent versus 8.3 percent growth in December and the 4 percent growth forecast by economists.

The Bank of England on Wednesday hinted that the interest rates are unlikely to rise anytime soon even as the unemployment rate fell faster than estimated in August. In its quarterly Inflation Report, the BoE's Monetary Policy Committee suggested that the interest rate is set to rise only in the second quarter of 2015, in line with current market expectations. The bank estimates that the unemployment rate has fallen to the 7 percent threshold in January this year.