Investing.com - Gold prices fell to the lowest levels of the session on Wednesday, after Federal Reserve Chair Janet Yellen said that the central bank is on track to raise interest rates "before year end."
In prepared remarks released before her testimony to the House Financial Services committee, Fed Chair Yellen said that the Fed is likely to raise rates 'at some point this year' if the U.S. economy and labor markets continue to show improvement in the coming weeks.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange shed $2.30, or 0.2%, to trade at $1,151.30 a troy ounce during U.S. morning hours.
A day earlier, gold fell to $1,144.40, a level not seen since March 17, before closing at $1,153.50, down $1.90, or 0.16%. Futures were likely to find support at $1,142.40, the low from March 17, and resistance at $1,163.90, the high from July 13.
Also on the Comex, silver futures for September delivery slumped 11.7 cents, or 0.76%, to trade at $15.19 a troy ounce. On Tuesday, silver declined 14.2 cents, or 0.92%, to end at $15.31.
Gold prices have been under pressure in recent weeks amid indications that the U.S. economy is regaining strength after a recent bout of weakness, supporting the case for higher interest rates later this year.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 97.00, up 0.2% for the day.
The euro weakened as investors waited to see if the Greek parliament would support harsh austerity measures demanded by the country’s creditors in order to secure a third bailout deal.
Four pieces of legislation must be passed by the end of the day on Wednesday, including pension and sales tax reforms.
Elsewhere in metals trading, copper for September delivery rose 0.8 cents, or 0.33%, to trade at $2.543 a pound during morning hours in New York.
Official data released earlier showed that China’s economy grew 7.0% in the second quarter, steady with the previous quarter and slightly better than analysts' forecasts for growth of 6.9%.
A separate report showed that industrial production rose by an annualized rate of 6.8% in June, above expectations for a 6.0% increase and following a gain of 6.1% in the preceding month.
Data on retail sales and fixed asset investment also beat forecasts, fueling speculation China's economy is regaining strength after a recent bout of weakness.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.