(Bloomberg) — Gold nudged lower as traders awaited comments from Federal Reserve Chair Jerome Powell for clues on the outlook for US interest rates.Most Read from BloombergPowell will testify before a Senate panel later on Tuesday and a US House of Representatives committee on Wednesday, at which he is expected to underscore that rates will go higher than policy makers had anticipated just a few weeks ago. Hot inflation and US jobs data has spurred traders to price in more Fed rate hikes, which typically curb the appeal of non-interest bearing bullion.Countering the pressure from rising rates, strong demand from central banks helped to underpin prices in recent months. Data on Tuesday showed China increased its gold reserves for a fourth month in February, joining other Asian nations in raising holdings as the dollar’s strength waned. Turkey has also been a key buyer lately.“For 2023, we need to consider both macro and demand-side factors, but the new trendline suggests gold is likely to be more reactive to changes in yields than it was in 2022,” Morgan Stanley said in a note. “Central bank purchases may slow down, but jewelry and technology demand could see a boost from China’s reopening.”Spot gold lost 0.3% to $1,841.08 an ounce as of 12:18 p.m. in London, after falling 0.5% on Monday. The Bloomberg Dollar Spot Index edged higher, while 10-year Treasury yields slipped. Silver, platinum, and palladium all dropped.Most Read from Bloomberg Businessweek©2023 Bloomberg L.P.
