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Gold prices fell on Wednesday as Treasury yields rose as markets waited for Federal Reserve Chairman Jerome Powell to comment on an expected cut in the US rate.
Spot gold was down 0.4% to $ 1,391.98 an ounce at 0103 GMT.
Gold futures in the US fell 0.4% to $ 1,394.40 an ounce.
The dollar index reached Wednesday its highest level in three weeks against a basket of major currencies, while the mitigation of sharp declines in US interest rates has led to higher Treasury yields.
Fed Chairman Powell will testify before Congress Wednesday and Thursday, and the direction of the US dollar depends on the tone of his comments.
Expectations for a 50 basis point rate cut this month have evaporated, but investors are still expecting a 25 basis point cut due to the weakness of inflation and inflation. concerns of the trade war.
Futures prices are still fully taken into account for a 25-basis-point cut at the July 30-31 Fed meeting, but they have abandoned bets on a half-point change. They had implied a 25% chance of aggressive reduction before the report on Friday's optimistic jobs.
During the night, Raphael Bostic, chairman of the Fed Atlanta Fed, left nothing to chance saying that the central bank was debating the risks and benefits of letting the US economy move a little faster ".
Asian stocks advanced on Wednesday.
On the trade front, White House economic adviser Larry Kudlow said US and Chinese trade officials held a "constructive" phone conversation on Tuesday.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.22 percent to 794.08 tonnes on Tuesday from 795.80 tonnes on Monday.
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