SINGAPORE: Gold prices firmed in Asian trade on Wednesday after getting a lift from weaker US Treasury yields and dollar, though the main focus was on Federal Reserve Chair Jerome Powell’s testimony due later in the day following a robust rise in consumer prices.
Spot gold was up 0.4% at $1,814.13 per ounce, as of 0639 GMT, while US gold futures rose 0.3% to $1,814.5.
While gold has made gentle gains on the back of slightly lower US dollar and yields, it has not been enough to decisively shift momentum higher, said Jeffrey Halley, a senior market analyst at OANDA.
“Gold held up surprisingly well overnight after the CPI data propelled the dollar higher and lifted long-dated bond yields. That should give some comfort to bullish investors that gold may finally be regaining its inflation hedging tailwind.”
Powell has repeatedly stated that higher inflation will be transitory, noting that he expected supply chains to normalize and adapt.
“I’m expecting a hawkish tone in Powell’s testimony. In that case, dollar will rise and gold will fall,” Jigar Trivedi, a commodities analyst at Mumbai-based broker Anand Rathi Shares said.
“Psychological support is at $1,800, but that will get breached very soon. I’m looking at $1,760 as a support for the next 15 days.”
Gold prices slumped 7% last month after the US central bank signalled at a sooner-than-expected interest rate increase.
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