FX.co ★ Gold Holds Near One-week Low On Hawkish Fed Bets

Gold prices held near one-week low on Wednesday as expectations for higher interest rates in the U.S. served to increase the opportunity cost of holding non-yielding bullion.

Spot gold edged up marginally to $1,813.70 per ounce, after having hit its lowest since Feb. 28 at $1,809.27 earlier in the session. U.S. gold futures were down 0.1 percent at $1,818.15.

The dollar scaled multi-month highs against most other major currencies after Federal Reserve Chair Jerome Powell signaled that interest rates would likely remain higher for longer than previously expected.

Powell said in his testimony before the Senate Banking Committee that the U.S. central bank would be prepared to reaccelerate the pace of rate hikes if the economy grows too quickly.

The Fed's next monetary policy meeting is scheduled for March 21-22, with CME Group's FedWatch Tool currently indicating a 70.5 percent chance of 50 basis point rate increase.

Powell's second day of testimony on Capitol Hill as well as reports on ADP employment change, the Fed's Beige Book and trade data for January may attract some attention later in the day.

Bank of Canada's rate decision is slated for release at 10.00 am ET. Economists expect the Bank of Canada to hold its interest rate at 4.50 percent.