Image Source: Reuters
By Ashitha Shivaprasad
(Reuters) - Gold prices edged up on Wednesday, aided by a dip in the U.S. dollar, with investors largely focusing on Federal Reserve Chair Jerome Powell's speech for insights into the U.S. central bank's monetary policy path.
Spot gold was up 0.1% at $1,751.89 per ounce, as of 0245 GMT. U.S. gold futures rose 0.1% to $1,765.40.
The dollar index was down 0.1%, making bullion less expensive for other currency holders.
Powell's speech at a Brookings Institution event, scheduled for 1830 GMT, will be evaluated for any new clues on the U.S. central bank's plans for rate hikes next year. The ADP National Employment report due at 1315 GMT is also on investors' radar.
Powell's speech is the main focus for the market, said Edward Meir, an analyst with ED&F Man Capital Markets.
"If Powell takes a hawkish stance, the dollar will strengthen and gold will move lower, probably back to the $1,745 level. But if he sounds more conciliatory, then gold could maybe move up to the $1,780 level."
High interest rates have kept a leash on gold's traditional status as a hedge against surging inflation and other uncertainties this year, as they translate into higher opportunity costs to hold the non-yielding asset.
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Meanwhile, top gold consumer, China reported a slight drop in new COVID cases for Nov. 29, the National Health Commission said.
Gold needs a strong China as it drives risk appetite and could bolster jewellery demand, and bullion could gain if China's health authorities provide some clear signals that they are close to tweaking their zero-COVID policy, Edward Moya, senior analyst with OANDA, said in a note.
Spot silver slipped 0.1% to $21.25. Platinum was up 0.3% to $1,004.75 and palladium rose 1.2% to $1,856.17.
China's factory activity contracted at a faster pace in November, an official survey showed, weighed down by softening global demand and COVID-19 restrictions.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu and Savio D'Souza)
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