KITCO NEWS - Federal Reserve Chair Janet Yellen on Wednesday sounded a more dovish tone on U.S. monetary policy, which made many investors 'wrong-footed' in the marketplace and was modestly supportive for gold. After a recent beatdown that pushed prices to a four-month low on Monday, the safe-haven metal was also due for a short-covering and bargain-hunting bounce, according to Kitco's global trading director Peter Hug. Gold prices eked a modest gain Tuesday, finishing the day well down from the session high. August Comex gold was last up $4.00 an ounce at $1,218.80. Commenting on Yellen's testimony before the House Financial Services Committee, Hug said, 'There was one sentence that caught my attention. She is looking for some help from the fiscal side here....and it becomes more questionable how effective the fiscal plans are.' 'If the Fed does continue to raise it will be extremely modest,' he added. Hug was also looking for gold to clear $1,220, now that it has, the veteran trader said it might still not be enough. 'I would like to see it close above [$1,220] and have momentum and see a follow-through move tomorrow.' On the topic of silver, Hug said that the metal needs gold's help right now. 'Silver has come back. I think silver has some issues at $16 an ounce but at this point, it needs gold to help it along. So, if we can get gold testing the $1,227 level, I see silver at $16.40- $16.50.' September Comex silver was last up $0.155 at $15.90 an ounce.

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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.