Gold slumps to lowest in a year on strong dollar, weak oil

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Gold prices slipped to their lowest in a year on Wednesday, as the dollar firmed after Federal Reserve chairman Jerome Powell's U.S. economic outlook reinforced views that the central bank is on track to steadily hike interest rates.

Powell reiterated his positive view of the USA economy in the second round of monetary policy hearings before legislators, although he noted the central bank was "slightly more anxious about lower inflation", a comment that could weigh on the pace for future rate hikes.

The dollar strength also played out in weaker commodity prices, with the platinum price dropping to its weakest level since 2008, casting a shadow on the struggling platinum producers.

Higher US interest rates, or the expectations thereof, have tended to boost the value of the dollar to the detriment of emerging-market currencies in particular, which previously benefited from the era of ultralow interest rates in developed economies.

Trump slams Fed's rate policy despite strong economy
The president also claimed that interest rate hikes would hinder his efforts to force China into fairer trade terms with the U.S. US President Donald Trump said he is willing to hit all Chinese goods imported to the United States with tariffs if necessary.

The US economy would be "especially vulnerable" because it would be the focus of retaliation in a tit-for-tat conflict, the Fund's chief economist Maurice Obstfeld said.

Spot gold was down 0.2 percent at $1,223.56 an ounce at 0703 GMT.

The two-year Treasury yield stood near 2.624 percent, its highest since August 2008 scaled on Wednesday.

The spread between two-year and 10-year Treasury yields hovered at its tightest level since July 2007, as Powell's comments supported traders' views of further rate increases from the US central bank. "If you look at the USA, we're just outpacing everyone in terms of rate hikes", said Minh Trang, senior FX trader, Silicon Valley Bank in Santa Clara, California.

No-confidence motion: AIADMK supported us, says Ananth Kumar
Interestingly, after the speech , Gandhi walked up to PM and hugged him. "The NDA will be united in vote against the motion". Parliamentary affairs minister Ananth Kumar has described as "childish" Rahul Gandhi hugging the Prime Minister.

The Fed has raised its key interest rate twice this year, most recently in June. USA crude futures slipped 0.54 percent to trade at $67.71 per barrel and Brent crude futures edged down by 0.46 percent to $71.83.

Analysts now see second-quarter S&P 500 earnings growth of 21.2 per cent, up from 20.7 per cent on Jul 1.

United States crude fell 0.29 per cent to US$67.88 (RM275.12) per barrel and Brent was last at US$71.89, down 0.37 per cent. Meantime, US trade relationships were also noted as President Donald Trump said his administration was getting closer to a deal with Mexico, and will meet European Commission president Jean-Claude Juncker next week.

Amid the simmering trade tensions, the Chinese yuan extended losses to touch a one-year low of 6.779 per dollar in offshore trading.

Israel strikes Gaza after its soldiers come under fire
The United Nations has urged Hamas and Israel to "step back from the brink" as tensions between the two sides continue to flare. More than 130 Palestinians have been killed by Israeli fire since the protests started on March 30.

Against the dollar, the pound traded at $1.3077, after hitting a 10-month low of $1.3010 on Wednesday.

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