Gold hits 1-year low as dollar firms up. Time to buy?

Bengaluru - With the USD on a solid footing, gold prices should stay pressured lower.

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.
24k gold is priced at Dh148.25 in Dubai and 22k can be bought at Dh139.25.
Spot gold was down 0.2 per cent at $1,224.16 an ounce.
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 per cent 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.
The dollar rose across the board on Wednesday, climbing to a six-month high against the yen, after US Federal Reserve Chairman Jerome Powell gave an upbeat outlook for the economy and reinforced views that the Fed was on track to steadily hike interest rates.
Meanwhile, another central banker on Tuesday said that with the US economy firing on all cylinders, the Fed should ease away from monetary policy accommodation and move interest rates up far enough to prevent unwanted inflation but not so fast that a recession ensues.
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.
Among other precious metals, silver slipped 0.5 per cent to $15.47 an ounce, after touching $15.39 per ounce, its lowest since July last year.
Platinum lost 0.6 per cent to $807.50 an ounce, and hit a two-week low of $804.75 an ounce earlier in the session.
Palladium climbed 0.1 per cent to $911.90 per ounce.

• Gold and Forex