18.07.201806:42:00UTC+00Gold Extends Losses As Powell Reinforces Rate Hike View

Gold prices fell on Wednesday to extend losses from the previous session as a bullish outlook from Federal Reserve Chairman Jerome Powell buoyed the dollar.

In testimony before the Senate Banking Committee, Powell on Tuesday offered a positive outlook of the U.S. economy and reiterated that gradually raising interest rates is "the best way forward." He also downplayed potential negative fallout from the ongoing U.S.-China trade spat.

Powell returns to Capitol Hill today for a second day of testimony, with markets looking for his comments on the impact of trade tariffs.

Spot gold was down 0.21 percent at $1,223 an ounce after falling about 1 percent on Tuesday to hit its lowest level since last July. U.S. gold futures for August delivery were down 0.37 percent at $1,222.80 an ounce.

The dollar hit a six-month high against the yen while the pound dropped to its weakest level in 10 months after U.K. inflation data missed forecasts.

The U.K. consumer price index unexpectedly came in flat at 2.4 percent year-over-year last month, raising questions over whether the Bank of England will deliver an August rate hike.