Gold Declines as Investors Absorb Hawkish Remarks from Powell

By Gina Lee

Gold prices declined on Wednesday morning in Asia, continuing to pull back from a two-decade high, amid increasing pressure from rising Treasury yields. Investors were also processing the latest comments from U.S. Federal Reserve Chairman Jerome Powell.

Gold was down 0.59%, trading at $1,808.24, as of 12:48 AM ET. The U.S. dollar, typically inversely related to gold, saw a slight uptick on Wednesday, extending its losses into a fourth consecutive day. An increased appetite for riskier investments has lessened the appeal of the safe-haven dollar.

During a speech on Tuesday, Powell emphasized the Federal Reserve’s commitment to raising interest rates as necessary to combat high inflation, which he indicated poses a risk to the economy’s stability. The Fed has already increased its interest rate by three-quarters of a percentage point in 2022 and is expected to implement further hikes of half a percentage point at its upcoming meetings in June and July.

Later in the day, Philadelphia Fed President Patrick Harker is scheduled to speak, and a meeting of G-7 finance ministers and central bankers will also occur.

In the Asia-Pacific region, Japan reported a 1% contraction in GDP, while Australia noted a 2.4% increase in its wage price index for the first quarter.

Strong U.S. retail sales and consumer sentiment indicators for April have boosted investor confidence, with consumers actively purchasing vehicles and dining out, showing resilience despite ongoing inflationary pressures.

In other precious metals, both silver and platinum saw a 0.2% and 0.1% increase in value, respectively.