* Dollar holds firm after Fed Chairman's testimonies
* Palladium touches near one-year low
* GRAPHIC-2018 asset returns: (Updates prices)By Zandi ShabalalaLONDON, July 19 (Reuters) - Gold sank to a one-year low onThursday as the dollar powered higher after comments from U.S.Federal Reserve chairman Jerome Powell which reaffirmedexpectations for more interest rate rises in the world's largesteconomy.Powell, in a closely watched two-day congressionaltestimony, said he believed the United States was on course foryears more of steady growth, and carefully played down the risksto the U.S. economy of an escalating trade conflict. The Fed raised rates in June and policymakers indicated theyexpect two more rate increases this year. Powell said nothing inhis testimony this week to undermine that, and said the economywas poised for several more years of growth.Gold is highly exposed to interest rates, particularly inthe United States, as higher rates lift the opportunity cost ofholding non-yielding assets and boost the dollar, in which goldis priced.Spot gold fell 0.7 percent to $1,217.95 per ounce by1422 GMT, having earlier touched its lowest since July 2017 at$1,211.08. U.S. gold futures for August delivery were0.9 percent lower at $1,216.56 an ounce."It's a tough environment for gold," said ETF Securitiesassociate director Anneka Gupta, adding that growth in the U.Seconomy and stronger corporate earnings undermined the metal.
"Gold is not being used as a safe haven right now despitethe ongoing trade war, and the stronger dollar is dominating thestory amidst the rate-rising environment."Gold is generally regarded as a safe and stable store ofvalue during times of global uncertainty.
The dollar rose to a one-year high against a basket of sixmajor currencies , supported by bullish comments fromPowell, which affirmed expectations for more interest rateincreases this year. "Gold should find first support at yesterday's low of$1,221, with the psychological $1,200 level to follow.Resistance (is) at $1,229, with this week's high of $1,245 abovethat," MKS PAMP Group said in a note.U.S. President Donald Trump said on Wednesday the UnitedStates may hammer out a trade deal with Mexico, and then do aseparate one with Canada later, sowing fresh doubts about thefuture of the North American Free Trade Agreement (NAFTA). Among other precious metals, silver was down 1.6percent at $15.27 an ounce, its lowest since last July.Platinum was 2.2 percent lower at $795 an ounce, itslowest since 2008. Palladium fell 1.6 percent to $893 perounce, having slipped to its lowest since August 2017 at$888.65. (Reporting by Zandi Shabalala in London and Karen Rodrigues inBengaluru; Editing by Elaine Hardcastle, Jan Harvey and KirstenDonovan)
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