Gold prices were subdued on Wednesday, weighed down by a firm dollar after data showed U.S. consumer prices last month rose by the most in 13 years, with focus now shifting to Federal Reserve Chair Jerome Powell’s testimony before Congress.
Spot gold was flat at $1,806.07 per ounce, as of 0057 GMT.
U.S. gold futures were 0.2% lower at $1,807.20 per ounce.
The dollar index held steady, having seen its best daily percentage gain in nearly a month late Tuesday. A stronger dollar makes gold more expensive for other currency holders.
U.S. consumer prices rose amid supply constraints and a continued rebound in the costs of travel-related services from pandemic-depressed levels as the economic recovery gathered momentum, raising the prospect that inflationary concerns are set to linger.
After the data, market focus shifted to the Fed, with the central bank’s chairman set to speak before the Congress later in the day for any cues on rising price pressures and monetary support.
Powell has repeatedly stated that higher inflation will be transitory, noting that he expected supply chains to normalize and adapt. Treasury Secretary Janet Yellen shares that view.
The White House expects supply chain pressures that are fuelling higher inflation to abate in the “not-too-distant future,” but cannot say exactly when, a senior official said on Tuesday.
Rising coronavirus infection rates, driven by the fast-spreading Delta variant, are forcing more countries around Europe to re-impose restrictions that could cast a pall over the region’s economic recovery prospects.
Silver was flat at $25.97, palladium and platinum were up 0.1% at $2,830.14 and $1,105.02, respectively.