2020.05.1311:10:00UTC+00Gold Holds Steady Ahead Of Powell Speech

Gold prices were little changed in lackluster trade on Wednesday as investors avoided making big bets ahead of a speech by Federal Reserve Chairman Jerome Powell on the economy later in the day.

Spot gold edged up 0.1 percent to $1,704.23 per ounce, while U.S. gold futures were little changed at $1,707.65 per ounce.

Powell's comments are going to be scrutinized by markets after U.S. President Donald Trump on Tuesday again urged the U.S. central bank to adopt negative interest rates.

"As long as other countries are receiving the benefits of negative rates, the U.S. should also accept the 'GIFT'. Big numbers!" Trump tweeted.

U.S. consumer prices in April dropped by the most since the Great Recession, weighed down by a plunge in demand for gasoline and services, including airline travel, the Labor Department said on Tuesday.

Markets expect that rates will remain extremely low for an extended period until the economy shows a sustainable recovery.

The Fed believes that negative rates would create downward pressure on bank profitability, which limits credit expansion.