By Apeksha Nair
BENGALURU (Reuters) - Gold prices edged higher on Tuesday as the dollar remained on the backfoot ahead of U.S. Federal Reserve Chairman Jerome Powell's first congressional testimony.
Spot gold was up 0.25 percent at $1,243.18 an ounce at 0723 GMT while U.S. gold futures for August delivery were up 0.3 percent at $1,243.20 an ounce.
Asian stocks sagged on Tuesday, weighed by a sharp decline in crude oil prices, and the dollar slipped 0.1 percent against major peers as investors awaited Federal Reserve Chairman Jerome Powell's first congressional testimony for any clues on the pace of U.S. interest rate rises.
Powell is likely to reiterate the Fed's gradual monetary policy tightening as he takes his upbeat view of the U.S. economy to Capitol Hill on Tuesday.
Escalating and sustained trade conflicts following U.S. tariff actions threaten to derail economic recovery and depress medium-term growth prospects, the International Monetary Fund warned on Monday.
Markets will be especially interested to see if Powell makes any comments about global trade tensions and how this will would affect the rate outlook going forward, INTL FCStone analyst Edward Meir said in a note.
Higher U.S. interest rates tend to boost the dollar, in which the metal it is priced.
"Investor appetite for gold is not very strong at the moment. I think that it is going to be trading sideways for a long time," said Richard Xu, a fund manager at China's biggest gold exchange-traded fund, HuaAn Gold.
"We've also noticed that Chinese gold ETF liquidity has dropped a lot these days so that means people do not see any major breakthrough in either direction," Xu said.
Demand for gold in top consumer China has been weak as an ongoing trade war with United States had weakened the local currency and affected investor sentiment, with prospects of pick up further dented after data showed slowing growth in the economy.
"If China is slowing down, there will be consequences to global commodity consumption and that's going to drag gold down as well," Xu added.
Spot gold is expected to break a support at $1,237 per ounce and fall to the next support at $1,226, according to Reuters technical analyst Wang Tao.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.15 percent to 794.01 tonnes on Monday.
Meanwhile, silver rose 0.4 percent to $15.80 an ounce, platinum was up 0.1 percent at $822.74 an ounce and palladium was 0.2 percent higher at $919.
(Reporting by Apeksha Nair in Bengaluru; Editing by Sunil Nair and Vyas Mohan)
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