© Reuters.

Investing.com– Gold prices fell from record highs in Asian trade on Wednesday as traders remained on edge before a closely-watched testimony from Federal Reserve Chair Jerome Powell, although a rout in risk-driven markets pointed to more safe-haven demand. 

The yellow metal shot up to record highs on Tuesday, buoyed by a mix of safe haven demand and persistent expectations that U.S. interest rates will eventually come down in 2024. 

fell 0.1% to $2,126.31 an ounce, while expiring in April fell 0.4% to $2,134.25 an ounce by 23:59 ET (04:59 GMT). Spot gold hit a record high of $2,142.15 an ounce, while gold futures hit a peak of $2,150.50 an ounce on Tuesday.

“It appears that many investors have been left out by the recent move higher, and with the rising risk of a stock market correction, have decided to move into gold,” analysts at ANZ wrote in a note. 

Gold’s Tuesday bounce came amid sharp losses in Wall Street, as stocks faced some correction at record high. 

Powell testimony awaited, gold outlook uncertain

Markets were now awaiting a two-day testimony from , beginning later in Wednesday, for more cues on U.S. interest rates.

Powell is expected to largely maintain his hawkish rhetoric and offer scant cues on interest rate cuts, especially as U.S. inflation remains sticky. 

Several Fed officials also warned in recent weeks that the Fed was in no hurry to begin trimming rates. 

The prospect of higher U.S. rates has limited any major upside in gold over the past year, with the yellow metal having rapidly fallen after hitting record highs in December. This trend could also put a timer on gold’s current rally, especially if Powell signals more hawkish than markets are expecting.

Other precious metals were mixed, and largely lagged gains in gold this week. rose 0.5% to $89.60 an ounce, while fell 0.5% to $23.858 an ounce.

Still, despite uncertainty ahead of Powell, traders largely maintained their bets that the Fed will cut rates by 25 basis points in June, according to the .

Beyond Powell, focus this week is also on data for February.

Copper prices muted as China uncertainty persists 

Among industrial metals, expiring in May steadied around $3.8518 a pound. 

The red metal saw little movement after China’s economic outlook for 2024 largely underwhelmed, as did Beijing providing scant cues on more policy support for the economy.