Investing.com -- Gold prices hovered above three-month lows on Wednesday, reeling from steep losses in the prior session as traders pivoted into the dollar ahead of more cues on U.S. interest rates.
Federal Reserve Chair Jerome Powell is set to testify before Congress later in the day, potentially offering more cues on the path of monetary policy and interest rates after mixed signals from the Fed last week.
Uncertainty over the Fed sparked some flows into the dollar, given that the central bank paused its rate hike cycle but signaled potentially more hikes later in the year. This had weighed on gold prices, keeping them largely within a tight trading range seen over the past month.
Gold, precious metals under pressure ahead of Powell testimony
Spot gold was flat at $1,937.58 an ounce, while gold futures steadied at $1,948.75 an ounce by 20:15 ET (00:15 GMT). Both instruments sank between 0.6% and 0.8% on Tuesday, also coming under pressure from stronger-than-expected U.S. housing data.
But despite falling for three straight days, gold prices were still trading within the $1,930 to $2,000 an ounce trading range seen since mid-May, amid a dearth of major catalysts for more movement.
While concerns over rising interest rates have limited any major gains in the yellow metal, it has also remained underpinned by expectations for worsening economic conditions later in the year.
Other precious metals moved in a similar band as gold, with platinum and silver futures falling slightly on Wednesday after steep losses in the prior session.
Focus is now on Powell's testimony, which is potentially expected to provide more cues on how the Fed plans to treat interest rates amid worsening economic trends this year.
Copper firms after China rate cut
Among industrial metals, copper prices rose slightly on Wednesday, extending mild gains from the prior session after major importer China cut its benchmark lending rates.
Copper futures rose 0.2% to $3.8865 a pound, after adding 0.5% in the prior session.
China cut its benchmark loan prime rate for the first time in 10 months, as the country struggles to release more stimulus and support a slowing economic rebound.
Copper was buoyed by hopes that Chinese economic trends will improve amid more stimulus measures, which in turn will boost the country’s appetite for commodity imports.
But broader sentiment over a Chinese economic recovery has also soured, with a slew of major investment banks cutting their outlook for full-year economic growth.