Gold futures settled lower on Wednesday amid concerns about the outlook for interest rates after Fed Chair Jerome Powell said in his testimony before the Congress that the central bank will have to keep its policy tight in order to fight inflation.
Powell said in his testimony before the Senate Banking Committee that the U.S. central bank would be prepared to reaccelerate the pace of rate hikes if the economy grows too quickly.
However, the dollar’s sluggish performance today limited the yellow metal’s downside.
The dollar index, which dropped to 105.37, recovered to around 105.65 later on in the session, posting a small gain.
Gold futures for April ended lower by $1.40 at $1,818.60 an ounce, after moving in a tight range between $1,813.40 and $1,821.00 an ounce.
Silver futures for May ended down $0.048 at $20.151 an ounce, while Copper futures for May settled at $4.0270 per pound, up $0.0520 from the previous close.
Payroll processor ADP released a report this morning showing private sector employment in the U.S. increased by more than expected in the month of February.
ADP said private sector employment jumped by 242,000 jobs in February after climbing by an upwardly revised 119,000 jobs in January.
Economists had expected private sector employment to increase by 200,000 jobs compared to the addition of 106,000 jobs originally reported for the previous month.
Meanwhile, the report said annual wage growth for those remaining in their jobs slowed to 7.2% in February, reflecting the slowest growth in 12 months.
ADP said annual wage growth for job changers also decelerated to 14.3% in February from 14.9% in January.