Gold Prices were slightly lower on Wednesday and hovered near a one-year low as the dollar strengthened following Federal Reserve Chairman Jerome Powell’s comments on Tuesday that reinforced views the central bank is on track to gradually raise interest rates.

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange slipped 0.04% to $1,226.80 a troy ounce by 12:55AM ET (04:55 GMT).      

A U.S. central banker said on Tuesday that the Fed should ease away from money policy accomodation and raise interest rate to avoid inflation as data showed the U.S. economy has improved in recent months.

"At a time of full employment with price stability, policy should be a neutral influence on economic activity," Kansas City Federal Reserve Bank President Esther George said in remarks prepared for delivery to an agricultural symposium. "Gradual further increases in our policy rate will be necessary to return policy to a neutral stance, although there is considerable uncertainty about exactly how far or fast we need to go."

His comments came after official data showed the country’s industrial production rose in June, boosted by a sharp rebound in manufacturing and further gains in mining output, the latest sign of robust economic growth in the second quarter.

The U.S. Dollar Index, which tracks the greenback against a basket of currencies, was up 0.13% to 95.05 on Wednesday.  

The dollar hit a six-month high against the yen, as the USD/JPY pair rose 0.1% to 112.97 after going as high as 113.08 earlier in the day, its strongest since January 9, following the upbeat remarks from Powell.  

In other news, Japan and the European Union signed a trade agreement on Tuesday that would allow more movement of goods and services between the two economies as they seek countermeasures against U.S.’s protectionism. The Economic Partnership Agreement would help Japanese car exports and making it easier for European farmers to sell their produce in the Asian nation.