Gold futures were flat Wednesday as the dollar recovered slightly, piling pressure on greenback-priced bullion along with firm Treasury yields and an aggressive inflation stance by the U.S. Federal Reserve chief.
Futures were down just 0.04% at $1,818.10 per ounce. Spot gold, however, climbed 0.3% to $1,819.78.
Gold has been consolidating since the end of last week but the overall direction is down, towards about $1,750, said Ilya Spivak, a currency strategist at DailyFX. "The question is when do we find fresh momentum to take us there?" Spivak said.
The dollar edged higher after a three-session slide, increasing the appeal of gold for investors holding other currencies.
"Gold's very focused on rates and the outlook for monetary policy, especially in the U.S.," Spivak said, adding that the dollar was not done rallying.
Fed Chair Jerome Powell on Tuesday pledged that the U.S. central bank would ratchet interest rates as high as needed to kill a surge in inflation that he said threatened the foundation of the economy.
Benchmark U.S. 10-year Treasury yields steadied after a sharp rise in the previous session, hurting demand for zero-yield gold.
The Fed has raised its benchmark policy rate by three-quarters of a percentage point this year, and is on track to increase it again in half-percentage-point increments at its next two meetings in June and July.
Although seen as an inflation hedge, bullion is sensitive to rising U.S. short-term interest rates and bond yields, which increase the opportunity cost of holding it.