Gold prices remain under pressure as Federal Reserve Chairman Jerome Powell signals a steady as it goes tone in his prepared testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
As expected Powell remained upbeat on the U.S. economy, saying growth has been "solid" so far this year.
"The latest data suggest that economic growth in the second quarter was considerably stronger than in the first," he said in his prepared remarks. "The solid pace of growth so far this year is based on several factors. Robust job gains, rising after-tax incomes, and optimism among households have lifted consumer spending in recent months."
Also as expected, Powell signaled that the central bank will continue to gradually raise interest rates as it normalizes its monetary policy and reduces its balance sheet.
"The FOMC believes that--for now--the best way forward is to keep gradually raising the federal funds rate. We are aware that, on the one hand, raising interest rates too slowly may lead to high inflation or financial market excesses," he said. "On the other hand, if we raise rates too rapidly, the economy could weaken and inflation could run persistently below our objective.
The gold market is seeing little reaction to Powell's comments as it dropped sharply a few minutes before the release of his prepared testimony. August gold futures last traded at $1,232.70 an ounce, down 0.57% on the day.