Gold prices rose on Monday as a softer US dollar helped the metal rebound from its biggest weekly loss this year, but moves were muted before the debut congressional testimony by US Federal Reserve Chair Jerome Powell later this week. Powell's appearance will be closely watched for clues on the US monetary policy outlook. The dollar index came off its highs, lifting gold after it fell last week to its biggest weekly drop in 2-1/2 months.
Spot gold gained 0.2 percent at $1,331.01 by 1:33 pm EST (1833 GMT), while US gold futures for April delivery settled up $2.50, or 0.2 percent, at $1,332.80 per ounce. "What's been most interesting this year is the breakdown of what gold is tracking most closely, and that has been the US dollar," Standard Chartered analyst Suki Cooper said, adding that underlying investment interest has been muted.
"My main concern with the price run-up that we've seen this year is that it hasn't been accompanied by broad investment demand," she said. "To really breach that $1,360-1,375 level, we need the US retail investor on board as well." Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion and strengthen the dollar, in which it is priced.
The heads of the European Central Bank and Bank of England are also set to give speeches this week. Fresh physical demand from China after the end of the week-long Lunar New Year holiday also supported gold, traders said.
Palladium increased 1.1 percent at $1,058.20 an ounce, while silver was up 0.2 percent at $16.57 an ounce and platinum gained 0.1 percent at $997.20 an ounce.
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