Gold slightly up as investors eye Powell testimony

Bengaluru — Gold prices rose marginally on Tuesday as investors awaited Congressional testimony by US Federal Reserve chair Jerome Powell and monthly jobs data, both of which could influence the interest rate policy.

Spot gold was up 0.1% at $1,847.81 an ounce at 3.44am GMT. US gold futures eased 0.1% to $1,853.20.

Higher interest rates rein in rising prices reduce investors’ appetite for non-yielding bullion.

Gold managed to climb higher as the dollar slipped, OCBC FX strategist Christopher Wong said. “Softer than expected US data last week somewhat raises the question if the solid data seen in February releases was just a one-off seasonal or statistical quirk,” he said.

Data last week showed a higher than expected decline of 4.5% in US durable goods in January, the largest drop since April 2020.

Data on Monday showed new orders for US-made goods fell in January, pulled down by a plunge in civilian aircraft bookings, but increases in machinery and a range of other products suggested that manufacturing could be regaining its footing.

The dollar index edged down 0.1%, making bullion more affordable for buyers holding other currencies.

Powell is due to deliver his semi-annual testimony before Congress on Tuesday and Wednesday, which will be closely watched for any hints on the US central bank’s tightening path.

“Gold may consolidate ahead of Powell’s testimony, but as the Fed tightening stretches into late cycle, gold can rebound once the Fed is done. The question is on the timing,” OCBC’s Wong said.

Market participants expect the Fed to raise rates by 25 basis points at its March 21-22 meeting, with a peak seen at 5.475% in September.

The US jobs report for February is due on Friday.

Gold may drop more to $1,837 an ounce after its failure to break a key resistance at $1,857, Reuters technical analyst Wang Tao said.

Spot silver rose 0.1% to $21.07 an ounce, platinum eased 0.1% to $974.68 and palladium fell 0.1% to $1,438.76.