Gold prices inched up on Wednesday after U.S. Federal Reserve Chairman Jerome Powell pledged not to raise interest rates. His testimony also pulled Treasury yields down, which lowered the opportunity cost of owning the non-interest-bearing metal. But the yellow metal’s gains were capped by a stronger dollar. The greenback rose 0.1% and made the bullion more expensive for investors using rival currencies.

Spot gold is currently trading at $1,783.90 per ounce as of 0820 GMT.

In his testimony before the Congressional Select Subcommittee on the Coronavirus Crisis, Powell reaffirmed their intention to ensure an inclusive job market recovery. The central will consider a broad set of labor market statistics in setting upcoming monetary policy, he explained.

The recent increase in the consumer price index to a 13-year high has some groups worried. But Powell argued that the inflation readings do not want warrant higher interest rates. The Feds will wait for evidence for higher inflation or other economic imbalances before touching the interest rates, he added.

On quantitative easing, some Fed officials have expressed support for beginning the debate on tapering. Dallas Fed President Robert Kaplan and St. Louis Fed President James Bullard have laid out the issues that need to be addressed by the central bank’s new strategic framework. But New York Fed President John Williams contended that it is still too early for any turn in policy. The recent economic data and conditions do no warrant a change in the Feds’ monetary policy, he added.

SPI Asset Management managing partner Stephen Innes expected the bullion to be in a range-bound market in the near term. He explained that Powell’s dovish statement did not push gold prices high enough. HDFC Securities senior analyst Tapan Patel predicted that spot prices might test a support level at $1,765 and resistance at $1,800 an ounce.

Meanwhile, the growth of factory activity in Japan slowed down in June. The au Jibun Bank Flash Japan Composite PMI dropped to 47.8, from 48.8 in May. Despite this, Japanese manufacturers remained optimistic for the year ahead.

The Bank of Japan highlighted the importance of massive stimulus measures in economic recovery from the pandemic. It indicates that the central bank will maintain its monetary policy for the time being. It would be positive for the yellow metal.