Gold slides to year nadir ahead of Powell's Congress testimony

Gold futures fell nearly one percent in American trade to July 17, 2017 lows, as the dollar index rose off July 11 lows for the first time in three sessions, following earlier industrial data from the US, and ahead of Federal Reserve Chair Jerome Powell's Congress testimony. 

As of 01:46 GMT, gold futures due on August 15 fell 0.63% to $1,231.90 an ounce from the opening of $1,239.70, marking a year nadir, while the dollar index rose 0.21% to 94.71 from the opening of 94.51.

US Industrial Data 

Earlier US data showed industrial production rose 0.6% in June, compared to a 0.5% dip in May, while analysts expected a 0.5% increase. 

The Capacity Utilization Rate rose to 78.0% in June from 77.7%, missing expectations of 78.4%. 

Federal Reserve Chair Jerome Powell will present the first half of his testimony on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC later today.

Powell will present the second half before the House Financial Services Committee tomorrow, with investors looking for clues on future monetary policies and interest rate hikes this year. 

World Gold Council 

Recently, the World Gold Council reported a 7% drop in global demand in the first quarter of 2018 to 973.5 tonnes, the lowest since the first quarter of 2008, as investments fell 27% on the precious metal to 287 tonnes from 383 tonnes in the first quarter of 2017. 

Central banks' gold demand rose 42% to 116.5 tonnes, especially from Russia, while jewelry demand steadied at 487.7 tonnes, as mine supplies grew 1% y/y to 770 thousand tonnes. 

Gold holdings at SPDR Gold Trust, the world's largest gold-backed investment fund, fell 1.18 tonnes on Monday to a total of 794.01 tonnes, the lowest since August 14, after gold prices marked a 5.4% loss in the second quarter of the year.