Gold prices move lower on Powell remarks

Gold prices moved lower on Tuesday, as comments by Federal Reserve Chairman Jerome Powell pushed the U.S. dollar higher despite the release of downbeat data on U.S. durable goods orders.

Comex gold futures were down 0.13% at $1,331.9 a troy ounce by 08:35 a.m. ET (12:35 GMT).

The greenback was boosted after Fed Chair Jerome Powell reiterated on Tuesday that the U.S. central bank would likely move forward with gradual increases in interest rates.

Powell was speaking at his first semi-annual monetary policy testimony to the House Financial Services Committee since taking over the helm of Fed earlier this month.

Gold is sensitive to moves in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.10% at 89.86.

Market participants shrugged off a report by the U.S. Commerce Department on Tuesday showing that durable goods orders declined more than expected last month.

Elsewhere on the Comex, silver futures dropped 0.54% to $16.46 a troy ounce.