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

Gold prices edged higher on Tuesday, as a slight retreat in the dollar offered support to the safe-haven metal, ahead of US 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.

US gold futures gained 0.2% to $1,786.10 per ounce.

"Gold rose overnight as the US dollar retreated and that (upbeat) sentiment continues in Asia this morning, as regional investors hurry to New York's overnight lead," said Jeffrey Halley, senior market analyst at OANDA.

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 US 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 US 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.

"Despite the rebound, gold prices were being traded mostly within last Friday's chart pattern, a pattern that is more reflective of a pause and indecision," Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

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.