By Nick Godt, MarketWatch NEW YORK (MarketWatch) -- Gold futures sank on Wednesday as the dollar regained some strength ahead of a written testimony from Federal Reserve Chairman Ben Bernanke, and as European lawmakers failed to reach a decision on how to deal with Greek's debt problems. Gold for April delivery fell $2.70, or 0.3%, at $1,074.50 an ounce in electronic trade in New York. On Tuesday, gold rallied as talk of a German plan to rescue Greece led stocks to soar, removing safe-haven demand for the dollar and lifting commodities. But the dollar gained some strength early Tuesday. The dollar index (DXY 80.01, +0.14, +0.18%) , which tracks the performance of the greenback against a basket of currencies, rose to 80.015 from 79.768 late in the prior session. A meeting between the German finance minister, Wolfgang Schaeuble, and law makers, ended on Wednesday without any concrete package of Greek aid announced. Expectations remain for a package to be announced on Thursday. Bernanke's testimony is expected to focus on the Fed's strategy for unwinding its massive monetary stimulus. Ultralow interest rates in the U.S., plus the Fed's discount lending programs, contributed to a sharp drop in the U.S. dollar last year. Read Bernanke preview. The dollar also advanced even after the government reported the U.S. trade deficit widened to $40.2 billion in December from $36.4 billion the month before. A weaker dollar tends to boost gold and metals as it makes them cheaper for holders of other currencies. Gold also loses its appeal as a hedge against weaker currencies. For gold, the "technical situation remains bearish after its recent break down below previous support $1,075 an ounce," analysts at GoldCore wrote in a note. "However, there would appear to be strong support at the $1,000 to $1,030-ounce price level which was the previous strong resistance."

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