Gold futures on Wednesday were trading higher, with bullion on track for a second straight day of gains, supported partly by softness in the U.S. dollar and a slight pullback in yields for government debt.

Investors in precious metals may be watching for testimony from Federal Reserve Chairman Jerome Powell, who will deliver the first of two days of twice-yearly congressional testimony on the state of the economy in the aftermath of COVID.

August gold
GCQ21,
+1.09%

GC00,
+1.09%

traded $8, or 0.4%, at $1,817.90 an ounce, following a 0.2% gain on Tuesday.

Powell on Wednesday will likely address mounting evidence of surging inflation, with headline CPI for June beating expectations, rising 0.9% after a 0.6% jump in May.

Gold has enjoyed a resurgence amid questions about the economic outlook in the recovery from COVID-19, a rebound that is complicated by the spread of delta variants of the virus and growing pricing pressures that might compel the Federal Reserve to soon scale back its accommodative policies and eventually raise interest rates.

Commodity experts say that gold has particularly benefited from a struggle to see COVID restrictions removed in parts of Europe and Asia.

Australian authorities extended a lockdown in Sydney on Wednesday by at least 14 days, Reuters reported.

“Gold rose during early Wednesday trading, with its safe-haven appeal increasing as investors reacted to news that several countries in the Asia-Pacific region continue to tighten restrictions in efforts to halt rising COVID cases,” wrote Ricardo Evangelista, senior analyst at ActivTrades, in a daily note.

On Tuesday, precious metals did, however, see gains checked by a surge in the dollar, which rose by about 0.5%, as gauged by the ICE U.S. Dollar Index
DXY,
-0.36%
.

On Wednesday, the U.S. dollar index was down 0.2%, while the 10-year Treasury note rate
TMUBMUSD10Y,
1.376%

was also lower, yielding 1.39%.

A weaker dollar and lower yields can make precious metals, which don’t bear a coupon and are priced in dollars, more enticing to prospective buyers.

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