Gold drifted lower in Europe, under pressure from higher Treasury yields after Federal Reserve Chair Jerome Powell reiterated the central bank will continue raising interest rates.
Two more hikes this year was "a pretty good guess," Powell said in his semi-annual testimony to Congress on Wednesday, underscoring his commitment to bringing inflation back down to its 2% target. Yields on 10-year Treasuries climbed on Thursday as markets digested Powell's comments -- pressuring non-interest bearing bullion.
Investors are focusing on the growing number of central banks in developed nations turning more hawkish this month. Traders are betting the Bank of England will have to accelerate the pace of interest-rate hikes after data Wednesday showed inflation remained at 8.7%, higher than expected for a fourth month.
Still, a key segment of the Treasury yield curve inverted by a percentage point following the Fed chair's speech. That suggests bond investors are worried about the chance of a recession, which could boost gold's haven appeal.
Bullion is struggling to regain strength after losing support over recent weeks due to the chance of US rate cuts this year all but disappearing, while fears over a banking crisis eased. It's down about 6% from a peak in early May.
Spot gold fell 0.3% to $1,927.79 an ounce as of 11:49 a.m. in London. The Bloomberg Dollar Spot Index was little changed. Silver held steady, while platinum rose 0.2% and palladium slipped 0.9%.
Source : Bloomberg
