Gold prices were little changed on Wednesday after a more than 1 percent drop in the previous session as investors interpreted comments from Federal Reserve Chairman Jerome Powell to mean that the United States may raise interest rates more frequently than anticipated this year. Spot gold was almost unchanged at $1,317.90 an ounce at 0758 GMT. It closed 1.1 percent lower on Tuesday after hitting the lowest since February 9 at $1,313.26.
US gold futures were up 0.1 percent at $1,319.3 per ounce. "We might be entering a short-term period in the gold market where we could see more dollar strength, higher bond rates and a return to equity weakness, a familiar backdrop that could pressure gold lower," INTL FCStone analyst Edward Meir said in a note.
The dollar index, which measures the greenback against a basket of six major currencies, rose on Tuesday to its highest since February 9 after Powell gave testimony to the US Congress that indicated the possibility of four interest rate hikes this year rather than the three that market participants are expecting. Spot gold is expected to break a support at $1,317 per ounce and fall more to the next support at $1,303, as suggested by its wave pattern and a projection analysis, according to Reuters technical analyst Wang Tao.