NEW YORK/LONDON: Gold prices fell for the second straight day and hit a one-week low on Wednesday, pressured by earlier strength in the US dollar and as investors assessed Federal Reserve Chair Janet Yellen's testimony before a congressional committee.
Yellen was thrust into the election-year boxing ring during the hearing, defending the central bank's regulatory role and considering changing the annual stress tests it gives to US banks to see if they can withstand a massive financial crisis.
Spot gold fell 0.4 percent at $1,322.22 an ounce by 3:11 p.m. EDT (1911 GMT). It fell nearly 1 percent on Tuesday, its biggest single-day loss in a month, on stronger risk appetite.
US gold futures settled down 0.5 percent at $1,323.70.
"Today it's everyone being very focused on Washington and ignoring the global scene," said Mariann Montagne, senior investment analyst and portfolio manager for Gradient Investments in Minneapolis.
"The reason for the slight pullback is that (the market is) expecting (Yellen) to sound more hawkish."
Meanwhile, Chicago Fed President Charles Evans said that raising rates because of financial stability concerns could leave the US central bank less able to reach its inflation target. Minneapolis Fed President Neel Kashkari said rates could stay low for a while as inflation remains weak.
"We also have Friday's US inflation reading, which is the bank's preferred measure of inflation and if that shows tick up towards the 2 percent target, it would give more confidence to markets that the Fed will move to raise rates in December," said Mitsubishi Corp analyst Jonathan Butler.
Gold prices pared losses after OPEC agreed to cut its oil output for the first time since 2008, causing oil prices to jump as much as 6 percent.
Gold is often seen as a hedge against oil-led inflation.
The dollar pared gains of up to 0.3 percent against a basket of six major currencies.
Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.22 percent to 949.14 tonnes on Tuesday.
Among other precious metals, palladium was up 2.1 percent at $712.55 an ounce, the highest since Aug. 18.
Spot silver was 0.1 percent lower at $19.12 an ounce. The metal fell 1.4 percent in the previous session, its biggest one-day loss in nearly three weeks.
Platinum was up 0.3 percent at $1,025.25, after falling over 1 percent in the prior session.
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