Gold Declines as Dollar Strengthens Ahead of Powell Testimony
(Bloomberg) -- Gold slipped as the dollar strengthened ahead of testimony by Federal Reserve Chair Jerome Powell, who may provide more clues on the outlook for monetary policy.
Inflation had picked up but should move back toward the Fed’s target once supply imbalances clear, Powell said in written remarks for his appearance Tuesday before a U.S. House subcommittee. Powell may face questions on his views about the pace of the economic rebound.
Bullion tumbled the most in 15 months last week after the Fed brought forward the time line for projected rate hikes at its policy meeting. Hedge funds and other large speculators cut their bullish gold bets to the lowest in a month in the week ended June 15, U.S. government data showed on Monday.
“All eyes will be on Chair Powell’s testimony to Congress this afternoon,” TD Securities analysts led by Bart Melek said in a note. The analysts expect the pullback in gold prices may have more room to run, with speculative and physical flows slowing. “Markets will be watching to see if Powell walks back” the hawkish tone from last week’s Fed meeting, they said.
Spot gold fell 0.3% to $1,778.53 an ounce at 1:36 p.m. in New York, after climbing 1.1% on Monday. Prices fell 6% last week, the most since March 2020. Futures for August delivery on the Comex fell 0.3% to settle at $1,777.40. Spot silver and palladium declined while platinum rose. The Bloomberg Dollar Spot Index was little changed after rising as much as 0.4% earlier.
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