Gold prices in tight range ahead of Powell testimony

GOLD prices traded in a tight range on Tuesday (Mar 8), as investors cautiously awaited the monthly US jobs data and Federal Reserve chair Jerome Powell’s Congressional testimony, both of which could influence interest rate policy.

Spot gold was down 0.1 per cent at US$1,845.45 per ounce, as of 0109 GMT. US gold futures fell 0.2 per cent to US$1,851.00.

The dollar index edged up 0.1 per cent, making bullion less affordable for buyers holding other currencies.

Data on Monday showed new orders for US-manufactured 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.

Global supply chains have “returned to normal”, the Federal Reserve Bank of New York said on Monday, with pressures dropping to the lowest since before the Covid-19 pandemic, which could also point to softening inflation.

Fed’s 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.

The US jobs report for February is due on Friday.

Although gold is considered a hedge against inflation, rising interest rates tend to decrease the appetite for zero-yield bullion.

Market participants expect the Fed to raise rates by 25 basis points at its Mar 21-22 meeting, with a peak seen at 5.488 per cent in September.

SEE ALSO

Gold eases on firmer dollar, rate-hike fears

Spot silver was unchanged at US$21.03 per ounce, platinum fell 0.3 per cent to US$972.71 and palladium slipped 0.7 per cent to US$1,430.79. REUTERS