Gold held steady on Wednesday as the dollar traded near three-week lows, after U.S. Federal Reserve Chairman Jerome Powell reiterated that the central bank will be patient in hiking interest rates, while palladium hovered near the psychological level of $1,550.
Spot gold inched down 0.1 percent to $1,327.31 per ounce as of 0625 GMT, while U.S. gold futures were up 0.1 percent at $1,329.4.
The dollar index against major currencies was at 96.134, after shedding 0.4 percent overnight to its lowest since Feb. 5 at 95.948.
“Gold has found very good support at $1,300, especially after the Fed’s stance,” said Mark To, head of research at Wing Fung Precious Metals in Hong Kong.
“At this moment, people have very diverse views on the course of Fed. But it is patient and more data dependent, which is going to be good for gold. $1,300- $1,400 should be very reasonable price range for this year.”
During his testimony before the U.S. Senate Banking Committee on Tuesday, Powell reiterated that the Fed will remain “patient” in deciding on further interest rate hikes.
Meanwhile, spot palladium slipped 0.6 percent to $1,550.50 per ounce, after scaling a record peak of $1,565.09 in the previous session.
The autocatalyst metal has climbed 23 percent this year on widening supply tightness in the market, while threats of strikes by mineworkers in South Africa added support to the metal.
Analysts say that though the fundamental reasons are still intact the strong rally in prices, in a very short duration, has increased risk of profit taking or correction.
Norilsk Nickel, the world’s largest palladium producer, said tighter emissions regulations in all major markets and flattish primary supply would widen a palladium deficit in 2019.
Investors will be keeping an eye on the U.S.-North Korean summit, scheduled to kick-off in Hanoi later on Wednesday.
U.S. President Donald Trump and North Korean leader Kim Jong Un were due to meet for their second summit, betting that their personal relationship can break a stalemate over the North’s nuclear weapons and end more than 70 years of hostility.
Elsewhere, silver fell 0.5 percent to $15.86 per ounce, while platinum was up 0.4 percent at $859.5 per ounce, after scaling its highest since early November at $862.5 earlier in the session.
“Although platinum has bounced back to 3-month highs on mine strike fears, such a boost is likely to be limited,” Metals Focus said in its weekly note.
“Widening structural surplus in the platinum market since 2016, is expected to persist for the foreseeable future.”