Bengaluru — Gold prices slipped on Thursday, just below a four-week high hit in the previous session as the dollar clawed up in Asia trade after falling the day before as US Federal Reserve chair Jeremy Powell signalled “powerful support” for economic recovery.
Spot gold fell 0.2% to $1,823.87/oz by 3.33am GMT, having hit a peak since June 16 on Wednesday at $1,829.55. US gold futures were flat at $1,824.70.
At the beginning of his two-day testimony before the Congress, Powell stuck to the view that the current price increases are transitory and the Fed expects to continue its bond buying until there is “substantial further progress” on jobs, with interest rates pinned near zero likely until at least 2023.
Rising inflation is going to keep investors on edge but they are becoming more comfortable about the Fed’s stance, allowing them to continue to build positions in the market, said ANZ analyst Daniel Hynes.
“The conditions are relatively supportive of further gains [in gold … It’s not going to be a sprint but a very gentle, gradual trend higher for the year at the moment,” Hynes added.
Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.
Weighing on gold’s appeal, the dollar was up 0.1% in Asia trade, after Powell’s comments caused the US currency to retreat from recent peaks on Wednesday.
On the technical front, spot gold may test a resistance at $1,833/oz, a break above which could lead to a gain to $1,853, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver was steady at $26.23/oz.
Platinum eased 0.3% to $1,125.21/oz, having climbed to its highest level since June 16 in the previous session, while palladium fell 0.5% to $2,815.52.