The Fed Chairwoman Janet Yellen testified before the Joint Economic Committee of U.S. Congress on Thursday. She said that the U.S. labour market is close to full employment.

"I currently judge that U.S. economic growth is likely to be sufficient over the next year or two to result in further improvement in the labour market," she said.

Yellen expects inflation to pick up toward the Fed's 2% inflation target as "the disinflationary effects of declines in energy and import prices wane".

The Fed chairwoman noted that if the Fed delays its interest rate for a longer period, it could lead to a recession.

"Were the FOMC to delay the start of policy normalization for too long, we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals. Such an abrupt tightening would risk disrupting financial markets and perhaps even inadvertently push the economy into recession," Yellen said.

"Moreover, holding the federal funds rate at its current level for too long could also encourage excessive risk-taking and thus undermine financial stability;" she added.

Yellen also said that the interest rate hike will depend on the incoming economic data.

Oil prices traded higher on comments by Saudi Arabia and on the European Central Bank's (ECB) interest rate decision. The euro increased against the U.S. dollar as the ECB added further stimulus measures, but market participants were disappointed because they hoped for more stimulus measures.

News reported that Saudi Arabia is ready that the OPEC could cut its oil output by 1 million barrels per day (bpd) in 2016, but if non-OPEC members will join action.

Market participants are awaiting the release of the results of the OPEC meeting. The OPEC will meet in Vienna on December 04 to decide on the oil output limit. Analysts expect the OPEC to keep its output limit unchanged.

WTI crude oil for January delivery rose to $40.40 a barrel on the New York Mercantile Exchange.

Brent crude oil for January climbed to $43.49 a barrel on ICE Futures Europe.

Gold price rose as the euro increased against the U.S. dollar after the release of the European Central Bank's (ECB) interest rate decision. The ECB kept its interest rate unchanged at 0.05%, but lowered its deposit rate to -0.3% from -0.2%. The asset-buying programme will be extended until the end of March 2017. Earlier, the asset buying programme was intended to run until September 2016. The volume of the monthly purchases remained unchanged.

Market participants are awaiting the release of the U.S. labour market data tomorrow. The better-than-expected labour market data will add to speculation that the Fed will start raising its interest rate this month.

Yesterday's comments by the Fed Chairwoman Janet Yellen weighed on gold. She said in a speech on Wednesday that the U.S. economy is ready for an interest rate hike.

December futures for gold on the COMEX currently traded at 1055.50 dollars per ounce.

The U.S. Labor Department released its jobless claims figures on Thursday. The number of initial jobless claims in the week ending November 28 in the U.S. rose by 9,000 to 269,000 from 260,000 in the previous week, exceeding expectations for an increase to 268,000.

Jobless claims remained below 300,000 the 39th straight week. This threshold is associated with the strengthening of the labour market.

Continuing jobless claims increased by 6,000 to 2,161,000 in the week ended November 21.

The Caixin/Markit Services Purchasing Managers' Index (PMI) for China declined to 51.2 in November from 52.0 in October, missing expectations for an increase to 53.1.

The index was driven by a slower growth in total new work.

Employment continued to rise in November, while outstanding business continued to decline.

"The macro economy has moved further toward stable growth and the economic structure is improving. Future fiscal and monetary policies must be coordinated and large-scale stimulus should be avoided as much as possible," Dr. He Fan, Chief Economist at Caixin Insight Group, said.

The Fed Chairwoman Janet Yellen said in a speech on Wednesday that the U.S. economy is ready for an interest rate hike.

"I currently judge that U.S. economic growth is likely to be sufficient over the next year or two to result in further improvement in the labour market. Ongoing gains in the labour market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2 percent as the disinflationary effects of declines in energy and import prices wane," she said.

Yellen noted that downside risks from abroad declined.

"Although developments in foreign economies still pose risks to U.S. economic growth that we are monitoring, these downside risks from abroad have lessened since late summer," the Fed chairwoman said.

She added that the Chinese economy will continue to expand moderately and gradually, and the government could add further stimulus measures if needed.

West Texas Intermediate futures for January delivery rebounded to $40.61 (+1.68%), while Brent crude rose to $43.29 (+1.88%) after sharp declines yesterday, which were driven by U.S. crude stockpiles data and expectations of a pessimistic result of the OPEC meeting scheduled for Friday.

The U.S. Energy Information Administration reported an unexpected 1.2 million barrels rise in U.S. crude inventories marking the tenth weekly increase in a row. Analysts had expected stockpiles to fall by about 1.2 million barrels.

Most analysts don't expect any positive changes from tomorrow's meeting in Vienna. Saudi Arabia is likely to hold on to its strategy and maintain output ignoring non-Gulf OPEC members' calls to reduce production in order to support prices.

Gold is currently taking a breath at $1,053.20 (-0.06%) after a sharp fall on Wednesday. Yesterday's comments by Federal Reserve Chairwoman Janet Yellen suggested that the central bank is on track to conduct the first interest rate hike in nearly a decade this month.

Investors are waiting for the U.S. payrolls report due on Friday to reassure themselves that the central bank of the U.S. will take the anticipated step. Meanwhile a report from Automated Data Processing showed on Wednesday that the number of employed rose by 217,000 in November comfortably beating expectations for a 190,000 rise.

Assets in SPDR Gold Trust, the biggest gold-backed exchange-traded fund in the world, fell 2.41% to 639.02 tonnes on Wednesday, marking the biggest single-day percentage fall in four years.

(raw materials / closing price /% change)

Oil 40.10 +0.40%

Gold 1,052.70 -0.10%