Gold price down as dollar firms ahead of Yellen's testimony
New York (Sept 28) Gold prices hit a one-week low on Wednesday, as the dollar firmed and investors shifted their focus to Federal Reserve Chair Janet Yellen's testimony later in the day.
Yellen will give her semi-annual testimony before a Congressional committee, where she could be asked questions about the Fed's outlook on rates and the economy.
Financial markets will also monitor Cleveland Fed President Mester and Kansas City Fed President George's speeches on the economy and monetary policy at separate events.
Spot gold fell 0.1 percent to $1,325.31 an ounce by 1145 GMT. It fell nearly one percent on Tuesday, its biggest single-day loss in one month on a higher appetite for risk.
U.S. gold futures also eased 0.1 percent to $1,329.10 an ounce.
"It is probably going to be a case of watching out for these Fed officials' comments," Mitsubishi Corp analyst Jonathan Butler said.
"We also have Friday's U.S. inflation reading, which is the bank's preferred measure of inflation and if that shows tick up towards the 2 percent target, it would give more confidence to markets that the Fed will move to raise rates in December."
Butler added that traders were also watching a meeting of oil producers in Algiers this week to see if an agreement could be reached to ease a global glut of crude. Gold is often seen as a hedge against oil-led inflation.
The dollar was up 0.1 percent against a basket of six major currencies, making gold more expensive for foreign currency holders. "For now gold remains range-bound in a broad $1,305-1,345 range, with firm support and resistance close to these respective levels," Alex Thorndike, senior precious metals dealer at MKS PAMP Group, wrote in a note.
"We believe gold will continue to track this for the interim, with a break of either likely to see momentum build."
Holdings of the SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.22 percent to 949.14 tonnes on Tuesday. Among other precious metals, spot silver was down for the fourth straight session, down 0.1 percent at $19.13 an ounce. The metal fell 1.4 percent in the previous session, its biggest single day loss in nearly three weeks.
Platinum was unchanged at $1,022.25 after falling over 1 percent in the prior session.
Palladium was up 0.2 percent at $699.60 an ounce.