Gold hit a fresh one-year low on Thursday as the dollar stayed strong in view of upbeat comments from U.S. Federal Reserve Chairman Jerome Powell during his two days of testimony.
Wrapping up his semi-annual testimony to Congress about economic and monetary policy, Powell on Wednesday once again delivered an upbeat assessment and reiterated that strong growth will keep the Fed on its current path of gradually raising interest rates.
After hiking benchmark short-term interest rate a quarter percentage point in June, members of the Federal Reserve are telegraphing two more rate hikes this year.
Spot gold was down 0.81 percent at $1,215.73 an ounce while U.S. gold futures for August delivery were down more than one percent at $1,215.10 an ounce.
Markets are also closely watching global trade developments. U.S. President Donald Trump said on Wednesday the United States might pursue a separate trade deal with Mexico, and then negotiate with Canada later, raising fresh doubts about the future of the North American Free Trade Agreement (NAFTA).
Larry Kudlow, Trump’s top economic adviser, blamed Chinese President Xi Jinping for blocking a U.S.-China trade deal and suggested that the European Union will be offering a significant free trade offer during a visit to the U.S. next week.