July 10 (Reuters) - Gold prices slipped on Wednesday as
higher Treasury yields lifted the dollar, while markets awaited
testimony from Federal Reserve Chair Jerome Powell for clarity
on an expected U.S. rate cut.
FUNDAMENTALS
* Spot gold XAU= was down 0.4% at $1,391.98 per ounce at
0103 GMT.
* U.S. gold futures GCv1 slipped 0.4% to $1,394.40 an
ounce.
* The dollar index .DXY edged toward a three-week high
against a basket of major currencies on Wednesday, as easing
bets of deep U.S. interest rate cuts pushed Treasury yields
higher. USD/ US/
* Fed Chair Powell testifies before Congress on Wednesday
and Thursday and the direction of the U.S. dollar depends on the
tone of his comments. Expectations for a 50 basis point rate cut
this month have evaporated, but investors still expect a 25
basis point cut due to weak inflation and trade war worries.
* Futures 0#FF: are still fully priced for a
25-basis-point cut at the Fed's July 30-31 meeting, but have
abandoned wagers on a half-point move. They had implied a 25%
probability of an aggressive cut before Friday's upbeat jobs
report. FEDWATCH
* Overnight, Atlanta Fed bank president Raphael Bostic let
nothing out of the bag by saying the central bank was debating
the risks and benefits of letting the U.S. economy run "a little
hotter." * Asian shares inched ahead on Wednesday. MKTS/GLOB
* On the trade front, White House economic adviser Larry
Kudlow said U.S. and Chinese trade officials held a
"constructive" phone conversation on Tuesday. * SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.22% to 794.08
tonnes on Tuesday from 795.80 tonnes on Monday. GOL/ETF
DATA AHEAD (GMT)
* 0130 China CPI YY June
* 0200 (approx) China M2 money Supply YY June
* 0830 UK GDP Estimate YY May
* 0830 UK Manufacturing Output MM May
* 1400 US Federal Reserve Chairman Jerome
Powell testifies on the Semiannual Monetary Report to
Congress before the House Financial Services Committee
* 1800 US Federal Open Market Committee will
release the minutes from its June