Gold prices tumbled on Tuesday, extending losses to a third successive session, as the dollar strengthened against most major currencies after Federal Reserve Chair Jerome Powell’s testimony before the Senate Banking Committee.
Gold futures for August delivery ended down $12.40 or 1% at $1,227.30 an ounce, the lowest close since 14 July 2017.
Powell, in his testimony before Congress maintained an upbeat outlook for the U.S. economy and this very clearly suggests the Fed will continue to raise interest rates.
Describing recent inflation data that showed consumer inflation a little above the central bank’s 2% target, as “encouraging,” Powell said that the policymakers are of the view that the best way forward is to keep hiking rates gradually to keep inflation around its target.
The fed chair said the U.S. economy has grown at a solid pace so far this year and noted the latest data suggests economic growth in the second quarter was “considerably stronger” than in the first quarter.
The greenback gained in strength after the testimony, and the yellow metal, which was fairly steady till then, lost ground and kept sliding as the session progressed to eventually settle at its lowest price in a year.
The dollar index was up 0.41 or 0.43% at 94.68, coming off a low of 94.04.
Meanwhile, silver futures for September were down $0.177 or 1.12% at $15.635 an ounce and Copper futures were lower by $0.015 or 0.52% at $2.750 per pound.