NEW YORK: Gold regained some ground on Wednesday after shedding nearly 2% in the previous session as the dollar’s rally cooled, but any further advance is likely to be capped with Federal Reserve Chair Jerome Powell signalling more rate hikes.
Spot gold was up 0.3% at $1,819.57 per ounce by 11:32 a.m. ET (1632 GMT), after hitting its lowest since Feb. 28 at $1,809.27. US gold futures firmed 0.2% to $1,823.50.
The dollar eased from multi-month highs, making gold cheaper for overseas buyers.
“Gold can rally a lot more on any dovish data than it can fall on any hawkish data that reaffirms Powell’s comments,” Nicky Shiels, head of metals strategy at MKS PAMP SA, said.
The Fed will be likely to need to raise rates more than expected in response to recent strong data and is prepared to move in larger steps if the “totality” of incoming information suggests tougher measures are needed to control inflation, Powell said on the first day of his two-day testimony before Congress.
Gold fell nearly 2% following Powell’s comments on Tuesday.
On Wednesday, Powell said officials have not yet made a call on the size of the rate increase they’re almost certain to deliver at their upcoming meeting.
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