Investing.com - Gold prices edged lower in U.S. trading on Tuesday as investors snapped up safe-haven dollar positions ahead of Federal Reserve Chairman Ben Bernanke's testimony on Congress Wednesday.
Gold and the dollar tend to trade inversely with one another.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 0.50% at USD1,377.15 a troy ounce in U.S. trading on Tuesday, up from a session low of USD1,358.15 and down from a high of USD1,399.55 a troy ounce.
Gold futures were likely to test support USD1,323.00 a troy ounce, the low from April 16, and resistance at USD1,444.15, last Tuesday's high.
The dollar moved higher earlier Tuesday amid a flight to safety ahead of Fed Chairman Ben Bernanke's Wednesday testimony before Congress, with uncertainty as to whether or not stimulus measures and their timetables may arise.
Stimulus measures currently in place, such as the Fed's monthly USD85 billion bond-buying program, weaken the greenback by flooding the economy full of liquidity to keep interest rates low and encourage investing and hiring.
A weaker dollar and longer-term inflationary concerns make gold an attractive hedge under such conditions.
Federal Reserve governors have suggested in public recently that the U.S. central bank may begin to scale back stimulus tools this summer, causing uncertainty in markets that made the dollar more attractive due to its safe-haven appeal, which came at gold's expense.
Trading was somewhat choppy due to the uncertainty, with the dollar index jumping in and out of positive territory though gold remained largely lower.
Elsewhere on the Comex, silver for July delivery was down 0.55% at USD22.458 a troy ounce, while copper for July delivery was down 0.59% and trading at USD3.340 a pound.
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