"Gold should recover from this latest pullback as the move higher in real rates is unlikely to be sustained and we see longer-term value around these levels", UBS analysts said in a note.
The greenback advanced to near a 2-week high of 1.2858 against the pound, after having declined to 1.2908 at 2:00 am ET.
The Euro has steadied this morning after tallying considerable gains against the US Dollar on Tuesday's session, when EUR/USD climbed to 1.1489 - the highest its reached since the 1 of May. The yen gained against the greenback, with the dollar breaching the 114 handle. Euro/dollar was last trading at $1.1412. Further to this, the Fed Chair said how she saw "roughly equal odds that the USA economy's performance will be somewhat stronger or somewhat less strong than we now project".
Survey results from think tank Sentix showed that Eurozone investor confidence moderated in July. Including bonuses, earnings grew 1.8%, in line with consensus, but below the prior month's 2.1%. The kiwi showed similar pattern, rising to the $0.7237 level, after heavy losses yesterday.
Ms. Yellen pointed members of Congress to the lengthy rebuttal in the Fed's monetary policy report, which says the Fed uses a variety of policy rules to guide decision-making, but the recommendations vary widely. Indeed, Yellen says in her testimony, "because we also anticipate that the factors that are now holding down the neutral rate will diminish somewhat over time, additional gradual rate hikes are likely to be appropriate over the next few years".
The Philadelphia Fed president Patrick Harker, a voter on the Federal Open Market Committee, also echoed Brainard's sentiment. The VIX closed down 1.9% at 10.90.
The Treasury Department will put $20 billion worth of 10-year Treasury notes up for sale at 1 p.m. Auctions of US government paper can affect prices and yields for the outstanding market.
Federal Reserve Chair Janet Yellen responded Wednesday to comments made this week by JPMorgan (JPM) CEO Jamie Dimon on the risks of unwinding the Fed's accommodative monetary policies.
Oil-related stocks traded strong across the market as crude prices popped almost 2%, lifting West Texas Intermediate back above $45 a barrel, after data late Tuesday from the American Petroleum Institute showed a surprise, 8.1 million barrel drop in crude inventories. The American Petroleum Institute reported a fall of 8.13 million barrels, well below the forecasted reduction of 2.9 million and adding to a draw of 5.76 million barrels the prior week.