Gold halts 2-day drop as traders look to Janet Yellen for rate clue

LONDON: Gold today halted a two-day decline before a speech from Federal Reserve Chair Janet Yellen that may provide clues on the timing of a US interest rate increase.

Gold added 0.1 per cent to $ 1,125.99 an ounce. Prices dropped 1.3 per cent in the previous two days, extending a decline from a two-week high. The metal is down almost 5 per cent this year.

Silver also added 0.2 per cent to $ 14.80 an ounce.

Yellen will speak on Thursday in Amherst, Massachusetts, and will have the chance to detail if the Fed remains on track to raise rates this year, or validate many investors' view that a liftoff will be delayed until 2016.

Higher rates curb the appeal of the metal, which doesn't pay interest or give returns like other assets such as bonds and equities.

Investors are struggling for direction, with holdings in bullion-backed funds fluctuating between gains and losses in the past eight days, the longest run in two years. (Bloomberg)