Gold price slip, hovers near four-week peak on dovish US Fed chairman

Gold prices slipped on Thursday, just below a four-week high hit in the previous session as dollar clawed up in Asia trade after falling day before

By Eileen Soreng

(Reuters) - Gold prices slipped on Thursday, just below a four-week high hit in the previous session as the dollar clawed up in Asia trade after falling the day before as U.S. Federal Reserve Chair Jeremy Powell signalled "powerful support" for economic recovery.

Spot gold fell 0.2% to $1,823.87 per ounce by 0333 GMT, having hit a peak since June 16 on Wednesday at $1,829.55. U.S. gold futures were flat at $1,824.70.

At the beginning of his two-day testimony before the Congress, Powell stuck to the view that the current price increases are transitory and the Fed expects to continue its bondbuying until there is "substantial further progress" on jobs, with interest rates pinned near zero likely until at least 2023.

Rising inflation is going to keep investors on edge but they are becoming more comfortable about the Fed's stance, allowing them to continue to build positions in the market, said ANZ analyst Daniel Hynes.

"The conditions are relatively supportive of further gains (in gold)... It's not going to be a sprint but a very gentle, gradual trend higher for the year at the moment," Hynes added.

Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.

Weighing on gold's appeal, dollar was up 0.1% in Asia trade, after Powell's comments caused the greenback to retreat from recent peaks on Wednesday.

On the technical front, spot gold may test a resistance at $1,833 per ounce, a break above which could lead to a gain to $1,853, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver was steady at $26.23 per ounce.

Platinum eased 0.3% to $1,125.21 per ounce, having climbed to its highest level since June 16 in the previous session, while palladium fell 0.5% to $2,815.52.

 

(Reporting by Eileen Soreng in Bengaluru; editing by Sherry Jacob-Phillips and Vinay Dwivedi)