Gold hits year low

LONDON. — Gold hit its lowest in a year yesterday as the dollar steadied and most other markets were subdued before Federal Reserve Chair Jerome Powell testifies to the US Congress.

Powell will likely reiterate the Fed’s plan for gradual monetary policy tightening as he takes his upbeat view of the US economy to Capitol Hill later this session. Markets will focus on his views on recent trade tensions, however.

The dollar held steady below a one-year high yesterday as traders awaited Powell’s testimony for clues on the future rate outlook as well as risks from trade conflicts. The greenback has put in a solid performance this year amid the trade disputes.

“The problem here is even though you have safe haven factors that should in theory support gold, you’re having them drive investors to the safe haven of the dollar. That’s the biggest headwind for gold,” said Nikos Kavalis, director at Metals Focus.

A strong dollar tends to weigh on gold by making the dollar-priced metal costlier for non-US investors.

Spot gold was down 0,7 percent at $1,231.89 an ounce at 1329 GMT, having hit its lowest since last July at $1,230.40. The precious metal is down some 5 percent for the year. US gold futures for August delivery were down 0,8 percent at $1,231.80 an ounce.

The International Monetary Fund warned on Monday that escalating trade conflicts following US tariff actions threaten to depress medium-term growth prospects.