Gold price breaks higher on Yellen remarks

The gold price turned higher on Wednesday trading up more than $17 at $1,285 an ounce, after Fed nominee chairperson Janet Yellen came out in support of the central bank's stimulus program.

Yellen, a noted monetary policy dove and considered an architect of the US Federal Reserve's quantitative easing program, in a prepared statement said "supporting the recovery today is the surest path to returning to a more normal approach to monetary policy."

The Fed's is looking for signs of a solid recovery in the US economy as it prepares to start winding down its QE program running at $85 billion a month and set to reach $4 trillion by the end of the year.

But Yellen's statement seems to indicate that the economy is not there yet.

"We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession,” Yellen said adding that the jobless rate is "still too high” and the economy is performing "far short" of its potential.

Inflation remains low "and is expected to continue to do so for some time," according to Yellen, 67, who would be the first female to lead the US Federal Reserve.

"For these reasons, the Fed is using its monetary policy tools to promote a more robust recovery. A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases," she said.

The money printing in the US and similar action in Japan, Europe and elsewhere following the financial crisis in 2008-2009 have been a massive boost for gold.

Gold was trading around $830 an ounce before Chairman Ben Bernanke announced Q1 in November 2008.

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