Gold Spikes As Fed Yellen Reiterates Caution On Rate Hikes

Gold prices jumped Tuesday after Federal Reserve Chairwoman Janet Yellen stressed that the central bank will take a cautious approach to future rate hikes given the uncertain economic outlook. In a speech at The Economic Club of New York, Yellen also revealed that the Fed will rely on bond purchases if the economy stumbles, which the markets interpreted as dovish. June gold rose $15.40, or 1.2%, to $1,237.40 an ounce versus the $1,228.20 it was trading at before Yellen's comments. Gold had been in positive territory all session after the Case-Shiller report indicated that consumer prices are firmer. Gold is often used as an inflation hedge.