Gold market remains quiet ahead of Fed testimony

The gold market is seeing limited activity at the beginning of the week, with thin trading volumes expected due to a U.S. market holiday. Additionally, investors have held back from making significant bets as they await testimony from Federal Reserve officials, particularly Chair Jerome Powell, later in the week.

Currently trading at $1,955, gold prices have been rangebound, showing little movement.

Last week, the Federal Reserve paused its rate hike cycle for the first time in over a year. However, the central bank cautioned that there could be at least two more rate hikes this year, which dampened the outlook for gold prices.

Gold tends to struggle in an environment of higher interest rates, as it raises the opportunity cost of holding non-yielding assets. Although the U.S. dollar weakened following the Fed’s decision last week, gold has seen limited support.

The market will closely watch Federal Reserve Chair Jerome Powell’s testimony before Congress on Wednesday. This event is expected to provide insights into the central bank’s monetary policy stance, offering further guidance on the future course of action and potentially influencing the direction of gold prices.