Gold Prices Edge Up Following Powell Testimony; Trade News Remained in Focus

Investing.com – Gold prices edged up on Wednesday in Asia after U.S. Federal Reserve Chairman Jerome Powell testified before the Senate overnight.

At 11:57 PM ET (04:57 GMT), for April delivery on the Comex division of the New York Mercantile Exchange was up $2.05, or 0.15%, to $1,331.55 a troy ounce.

Powell said in the first of a two-day Congressional address at the Senate Committee on Banking that the U.S. economic outlook was “generally favorable” but still faced challenges from abroad.

“While we view current economic conditions as healthy and the economic outlook as favourable, over the past few months we have seen some crosscurrents and conflicting signals,” Powell said, adding that the central bank is monitoring how Brexit negotiations and Sino-U.S. trade talks play out. “We will carefully monitor these issues as they evolve.”

In its January meeting, the U.S. central bank halted its plans for further rate hikes, adding that it would be “patient” on raising rates amid muted inflation and rising risks to global economic growth.

Gold tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion.

Meanwhile, the Sino-U.S. trade news also remained in focus.

U.S. President Donald Trump said this week that a trade deal “could happen fairly soon” if U.S. and China could bride remaining differences, although it is possible that “it might not happen at all.”

Investor sentiment began to improve since the beginning of the week when Trump announced the postponement of a closely watched March 1 deadline to increase tariffs on Chinese imports, raising hopes that the two sides could soon reach an agreement.

The news boosted Chinese equities while other Asian indices also rose. The impact on gold prices seemed to be somewhat limited so far, as gold futures remained largely unchanged this week.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.