Investing.com - Gold prices were set to fall for a fourth straight session on Wednesday in Asia as traders continued to dial back expectations of aggressive interest rate cuts.
Gold futures for August delivery, traded on the Comex division of the New York Mercantile Exchange, were down 0.4% to $1,394.65 by 12:51 AM ET (04:51 GMT).
Gold prices began to fall last week after a better-than-expected U.S. jobs report dampened expectations that the Fed would reduce rates by a full half-point at the July 30-31 meeting.
All eyes are now on a speech by Federal Reserve Chairman Jerome Powell, who is due to appear before Congress on Wednesday and Thursday for his semiannual testimony.
“As Powell speaks, we’ll see if we get any insight into longer-term Fed thoughts as well as a July rate cut confirmation,” J.J. Kinahan, Chief Market Strategist at TD Ameritrade, said in a Forbes commentary.
“The futures market still puts 100% odds on a rate cut of at least 25 basis points at the next meeting later this month,” Kinahan added.
Gold benefits from the prospect of lower interest rates as the opportunity cost of holding non-yielding precious metal decreases.
The U.S. dollar index that tracks the greenback against a basket of other currencies inched up 0.1% ahead of Powell’s speech.
On the Sino-U.S. trade front, CNBC cited an unnamed U.S. official and reported that Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke to Chinese Vice Premier Liu He and Commerce Minister Zhong Shan on the phone, a U.S. official said.
China’s Ministry of Commerce confirmed in a statement that the call took place.
“Both sides will continue these talks as appropriate,” the official said, without providing any further details regarding the conversation between the two sides. U.S. top economic advisor Larry Kudlow previously said there is “no timeline” on the talks and emphasized “quality not speed.”