Jun 21, 2022 11:49PM ET
By: AnalysisWatch
Gold was down in Asia Wednesday morning as the U.S. dollar strengthened ahead of the Federal Reserve chairman's two-day hearing, where investors are expected to look for more clues on monetary policy.
By 11:43 a.m. ET, gold futures had fallen 0.42% to $1,831.10 as the dollar, which normally moves inversely to gold, rose, dampening demand for non-yielding gold.
"Gold is moving in a sideways range against the U.S. dollar right now, and we need a big directional change in the dollar to change that," Jeffrey Halley, senior analyst at OANDA, told Reuters.
Fed Chairman Jerome Powell is set to begin a two-day hearing before Congress later today, when investors are expected to get more clues on whether the Fed will go ahead with another 75 basis-point rate hike.
"If Powell comes out negative tonight, we could see a further rise in the U.S. dollar as yields rise again." That would put downward pressure on gold prices. Otherwise, I foresee minimal impact, "Halley added.
Concerns about an economic downturn, however, weighed on the market as CEO Elon Musk warned that the United States is on the verge of a recession.
According to Reuters technical analyst Wang Tao, gold prices could test support at $1,821 per ounce, with a good chance of falling below that level to as low as $1,812.
In other precious metals, silver fell 1.60%. Platinum fell 0.75%, while palladium slipped 1.22%.
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