Gold prices slipped to their lowest in a year on Wednesday, as the dollar firmed after Federal Reserve Chairman Jerome Powell's US economic outlook reinforced views that the central bank is on track to steadily hike interest rates. Spot gold was down 0.2 percent at $1,224.16 an ounce, as of 0657 GMT. Earlier in the session, the yellow metal hit its weakest since mid-July 2017 at $1,221.74 an ounce.
US gold futures for August delivery were 0.2 percent lower at $1,224.30 an ounce. The stronger dollar following Powell's comments weighed on gold prices, said Yuichi Ikemizu, Tokyo branch manager, ICBC Standard Bank.
"People are selling (instruments of) emerging markets, commodities and buying the dollar as it seems to be the most stable investment. As long as this trend continues ... it's a pretty tough situation for commodities," Ikemizu said.
Higher interest rates tend to boost the dollar and push up bond yields, making greenback-denominated gold more expensive for holders of other currencies and denting its appeal.
"With the USD on a solid footing, gold prices should stay pressured lower for the foreseeable future as gold has wholly lost its glittering appeal in this enduringly bullish equity and USD environment," said Stephen Innes, APAC trading head, OANDA.
However, Reuters technicals analyst Wang Tao said spot gold has found support at $1,226 per ounce and may hover above this level or bounce towards resistance at $1,237.