Gold prices were steady on Tuesday, as the U.S. dollar remained largely unchanged ahead of U.S. Federal Reserve Chairman Jerome Powell’s first congressional testimony.
Spot gold was up 0.1 percent at $1,241.20 an ounce at 0420 GMT, while U.S. gold futures for August delivery were up 0.1 percent at $1,241.60 an ounce.
The dollar index was steady against major peers on Tuesday,as investors awaited Federal Reserve Chairman Jerome Powell’s first congressional testimony for any clues on the pace of U.S. interest rate rises.
Fed’s Powell takes his upbeat view of the U.S. economy to Capitol Hill on Tuesday, with markets and many of his colleagues expecting two more interest rate increases this year amid a continued economic expansion.
Higher U.S. rates tend to boost the dollar, in which the metal it is priced.
Meanwhile, Asian stocks sagged on Tuesday, weighed by a sharp decline in crude oil prices. Brent crude futures shed over 4 percent on Monday as concerns over supply outages eased, but prices recovered after more oil workers went on strike in Norway threatening further disruptions.
“Investor appetite for gold is not very strong at the moment. I think that it is going to be trading sideways for a long time,” said Richard Xu, a fund manager at China’s biggest gold exchange-traded fund, HuaAn Gold.
“We’ve also noticed that Chinese gold ETF liquidity has dropped a lot these days so that means people do not see any major breakthrough in either direction,” Xu said.
Demand for gold in top consumer China has been weak as an ongoing trade war with United States had weakened the local currency and affected investor sentiment, with prospects of pick up further dented after data showed slowing growth in the economy.
Escalating and sustained trade conflicts following U.S. tariff actions threaten to derail economic recovery and depress medium-term growth prospects, the International Monetary Fund warned on Monday.
“If China is slowing down, there will be consequences to global commodity consumption and that’s going to drag gold down as well,” Xu said.
Spot gold is expected to break a support at $1,237 per ounce and fall to the next support at $1,226, Reuters technicals analyst Wang Tao said.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.15 percent to 794.01 tonnes on Monday.
Silver was up about 0.2 percent at $15.76 an ounce.
Platinum climbed 0.6 percent at $826.75 an ounce, while palladium rose 0.6 percent to $922.72.