By Seher Dareen
Gold prices gained for a third straight session on Tuesday, as the dollar and Treasury yields retreated ahead of the Federal Reserve Chair Jerome Powell's nomination hearing as bets for quicker U.S. interest rate hikes grow.
Spot gold XAU= rose 0.3% to $1,805.87 per ounce by 1027 GMT. U.S. gold futures GCv1 rose 0.4% to $1,806.10.
"Declining bond yields and a weaker U.S. dollar are pushing up gold prices above $1,800 this morning," said Carsten Fritsch, a commodities analyst at Commerzbank.
The yield on 10-year Treasury notes US10YT=RR backed off an almost two-year high and the U.S. dollar was lower against major peers. USD/ US/
Powell pledged "to prevent higher inflation from becoming entrenched" in comments prepared for delivery at his nomination hearing before the Senate Banking Committee for a second four-year term as head of the Fed on Tuesday. (Full Story)
"The manner in which Mr. Powell responds to these questions could hint at the 'hawkishness' of the Fed and consequently give markets some directional bias going forward," said DailyFX analyst Warren Venketas.
Focus then turns towards the U.S. core CPI data on Wednesday that is expected to have risen by an annual 5.4% in December, up from 4.9% in the prior month.
"An estimate beat could increase markets rate hike expectations and cement the much talked about 4th rate hike for 2022. Again, this should weaken gold prices," Venketas added.
Gold is considered a hedge against high inflation, but the metal is highly sensitive to rising U.S. interest rates which increase the opportunity cost of holding non-yielding bullion.
Spot silver XAG= rose 0.3% to $22.51 an ounce, platinum XPT= was little changed at $940.03, and palladium XPD= rose 0.9% to $1,929.06. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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