Gold prices retreated on Monday from an earlier 2-1/2 week high as traders awaited U.S. Federal Reserve Chair Jerome Powell‘s testimony this week for hints on future rate hikes.
Spot gold was down 0.2% at $1,851.52 per ounce as of 0930 GMT after hitting its highest since Feb. 15 in earlier trade at $1,858.19. U.S. gold futures rose 0.2% to $1,858.90.
All eyes are on Powell’s testimony to Congress on Tuesday and Wednesday, followed by the February jobs report due on Friday.
“Currently, gold is in a wait-and-see mode,” said UBS analyst Giovanni Staunovo. “There’s unlikely to be a change of script from Powell, reiterating the need for further rate hikes to bring inflation under control.”
Although gold is considered a hedge against inflation, rising interest rates tend to decrease the appetite for zero-yield bullion.
Data on Friday showed the U.S. services sector grew at a steady clip in February, suggesting the economy continued to expand in the first quarter.
San Francisco Fed President Mary Daly on Saturday said that if data continue to come in hotter than expected, interest rates will need to go higher, and stay there longer. On Sunday, top bullion consumer China set a modest target for economic growth this year of around 5% as it kicked off the annual session of its National People’s Congress.
Spot gold may extend gains into a range of $1,867-$1,876 per ounce as it has more or less broken resistance at $1,853, according to Reuters technical analyst Wang Tao.
Spot silver fell 0.4% at $21.15 per ounce, platinum slipped 1% to $967.45 and palladium lost 2.1% to $1,422.80.