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Gold Futures Settle Slightly Lower

Gold futures settled slightly lower on Wednesday, extending their decline to a third straight session. However, with the dollar drifting lower, gold's downside was just marginal.

The dollar index, which dropped to 103.86, recovered to 104.10, trimming its loss to just around 0.32%.

Gold futures for August ended lower by $0.40 at $1,838.40 an ounce, off the day's low of $1,824.50 an ounce.

Silver futures for July ended down by $0.347 at $21.421 an ounce, while Copper futures for July settled at $3.9440 per pound, down $0.0950 from the previous close.

Investors digested Federal Reserve Chair Jerome Powell's testimony before the Senate Banking Committee. In prepared remarks, Powell indicated the Fed plans to continue moving expeditiously to combat inflation but argued the U.S. economy is strong enough to handle tighter monetary policy.

However, Powell later acknowledged that achieving a "soft landing" will be "very challenging" due in part to factors outside of the Fed's control and noted a recession is "certainly a possibility."

Powell said the pace of future interest rate hikes will be dependent on incoming data and the evolving outlook for the economy and suggested the Fed will need to see "compelling evidence" that inflation is slowing before it begins to scale back its monetary policy tightening plans.

The Fed Chief said the central bank will strive to "avoid adding uncertainty in what is already an extraordinarily challenging and uncertain time."

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