By Zhang Mengying
Investing.com – Gold was down on Wednesday morning in Asia as the U.S. dollar firmed ahead of U.S. Federal Reserve Chair’s two-day testimony where investors are expecting to seek more clues on monetary policies.
Gold futures fell 0.42% to $1,831.10 by 11:43 PM ET (3:43 AM GMT). The dollar, which normally moves inversely to gold, edged up on Wednesday morning, denting demand for non-yielding bullion.
“Gold is content to trade inversely to the U.S. dollar in a sideways range at the moment, and we’ll need a big directional move from the greenback to change that,” OANDA senior analyst Jeffrey Halley told Reuters.
Fed Chair Jerome Powell will start a two-day testimony to Congress later in the day, with investors looking to see more clues on if the Fed will deliver another interest rate hike of 75 basis points.
“If Powell is hawkish tonight, we could see another bout of U.S. dollar strength as yields rise again. That would push gold lower. Otherwise, I foresee minimal impact,” Halley added.
However, concerns of an economic downturn continued to weigh on the market, with Chief Executive Officer Elon Musk warning that the U.S. is heading toward a recession.
Looking ahead, spot gold may test a support at $1,821 per ounce, with a good chance of breaking below this level and falling to $1,812, according to Reuters’ technical analyst Wang Tao.
In other precious metals, silver plumged 1.60%. Platinum fell 0.75% while palladium slid 1.22%.