Gold ticks up on subdued dollar ahead of Fed chief's testimony

Tuesday,   22-Jun-2021   09:31 AM (IST)

Gold prices edged higher on Tuesday, as a slight retreat in the dollar offered support to the safe-haven metal, ahead of U.S. Federal Reserve Chairman Jerome Powell’s testimony to Congress later in the day. Spot gold was up 0.3% at $1,787.42 per ounce, as of 0311 GMT, after rising more than 1% in the previous session. U.S. gold futures gained 0.2% to $1,786.10 per ounce. Making gold less expensive for holders of other currencies, the dollar index slipped from two-month high against its rivals. All eyes are now on Powell, who will appear before Congress at 1800 GMT. The U.S. economy continues to show “sustained improvement” from the impact of the COVID-19 pandemic and ongoing job market gains, but inflation has “increased notably in recent months,” he said in his prepared remarks. Gold is viewed as a hedge against higher inflation that could follow stimulus measures. The U.S. central bank in its latest policy meeting hinted at sooner-than-expected interest rate hikes and tapering of its asset purchase programme, which sent gold prices sharply lower last week. However, hawkish Fed officials such as St. Louis Fed President James Bullard and Dallas Fed President Robert Kaplan on Monday offered a toned-down rhetoric. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.3% on Monday. Elsewhere, silver eased 0.2% to $25.90 per ounce, palladium fell 0.2% to $2,579.43. Platinum climbed 0.7% to $1,060.19.