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By Bloomberg

Gold rebounded from the lowest level in seven weeks and silver rose after Federal Reserve Chair Janet Yellen signaled an interest-rate increase isn’t imminent. Palladium climbed to the highest in six weeks.

Yellen, testifying to the Senate Banking Committee on Tuesday, indicated that a change in the Fed’s guidance on interest rates won’t lock the central bank into a timetable for tightening. Higher interest rates curb gold’s appeal because the metal generally gives returns only through price gains.

While the labor market is improving, inflation and wage growth remain too low, Yellen said. She’s scheduled to appear before the House Financial Services Committee on Wednesday. The Bloomberg Dollar Spot Index was 0.1 percent lower, falling for a second day.

“Yellen seemed to indicate that she will not put rates up for another two quarters,” Carole Ferguson, an analyst at SP Angel Corporate Finance LLP, said in a phone interview from London. “This is being read as supportive for gold and negative for the dollar.”

Gold for April delivery rose as much as 1.2 percent to $1,211.70 an ounce and traded at $1,209.50 at 8:05 a.m. on the Comex in New York, rebounding from three days of losses. Bullion dropped to as low as $1,190 an ounce on Tuesday, the lowest price since Jan. 5.

Futures trading volumes in New York were 30 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Holdings in bullion- backed exchange traded products increased for a fifth session to 1,679.8 metric tons as of Tuesday, the highest since October.

Prices may get a boost from buyers in China, who returned from a week-long holiday on Wednesday, Howie Lee, an investment analyst at Phillip Futures Pte, wrote in a note.

Palladium for June delivery advanced 1.7 percent to $805 an ounce in New York, the highest since Jan. 14. Silver for May delivery climbed 2.5 percent to $16.64 an ounce. Platinum for April delivery added 0.8 percent to $1,171.80 an ounce.