Gold prices fell on Thursday as U.S. Federal Reserve Chairman Jerome Powell's latest comments bolstered expectations for faster monetary policy tightening and overshadowed Omicron-led safe-haven inflows into bullion.
Spot gold fell 0.7% to $1,769.86 per ounce by 0909 GMT. U.S. gold futures dropped 0.8% to $1,770.90.
In his second day of testimony in Congress on Wednesday, Powell said the Fed needed to be ready to respond to the possibility that inflation might not recede in the second half of 2022 and that it would consider a faster tapering of its bond purchases at its meeting due to start on Dec. 14.
While gold is considered an inflation hedge, reduced stimulus and interest rate hikes push government bond yields up, raising the opportunity cost of holding the non-yielding bullion.
Therefore, the prospect of a faster taper may well act as a cap on further gains in bullion, said Michael Hewson, chief market analyst at CMC Markets UK, with the likelihood of a stronger U.S. dollar and higher Treasury yields also bound to weigh on gold's appeal.
Investors now await the U.S. jobs report for November due on Friday that could influence the Fed's rate stance. Data showed on Wednesday private payrolls increased by 534,000 jobs last month.
"A decent set of jobs numbers also has the potential to push gold lower, towards $1,740, but overall bullion remains in a range, capped around $1,810 and support at $1,740," Hewson said.
Elsewhere, spot silver rose 0.1% to $22.32 per ounce and platinum gained 0.7% to $939.75.
Palladium fell 0.5% to $1,739.02 per ounce.
"Palladium's industrial use is getting weighed down because we're not getting big demand from automobiles and that's feeding into speculative fervour," said Stephen Innes, managing partner at SPI Asset Management.
(Reporting by Arundhati Sarkar and Nakul Iyer in Bengaluru; Editing by Subhranshu Sahu) ((Arundhati.Sarkar@thomsonreuters.com; twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776))