FED Chairman's testimony before Congress

Gold prices fell from historic levels as investors evaluated Fed Chairman Jerome Powell's congressional testimony and new trade policy statements from US President Donald Trump.

Market sentiment is mainly influenced by two important developments. First, President Donald Trump's announcement on Sunday of plans to impose 25% tariffs on imported steel and aluminum, with no exceptions or exemptions, has raised concerns about potential trade conflicts.

Second, FED Chairman Jerome Powell's hearing also had a big impact on market developments. In his opening speech, Mr. Powell emphasized that the FED remains cautious in cutting interest rates, citing the solid economy and inflation continuously exceeding the FED's 2% target.

Investors are closely watching Mr. Powell's two-day testimony for clues about upcoming monetary policy, especially in the context of consumer price index (CPI) data about to be released. If inflation is higher than expected, market expectations of two interest rate cuts this year could be challenged.

The decline in gold prices from record highs also reflects profit-taking activities after a strong increase since mid-December, with an increase of about 370 USD, equivalent to 14.25%. This adjustment shows that investors are taking advantage of profit-taking opportunities, while reassessing the outlook for monetary policy and trade risks.