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PRECIOUS-Gold eases as dollar firms and investors await Powell testimony

Published 23/02/2021, 09:42 pm
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* Gold's trend seems to be to the downside -analyst

* U.S. 10-year yields hover near one-year high

(Updates prices)

By K. Sathya Narayanan

Feb 23 (Reuters) - Gold eased from a one-week peak on Tuesday, pressured by a firmer dollar, but held in a tight range as investors turned cautious ahead of U.S. Federal Reserve Chairman Jerome Powell's testimony to Congress later in the day.

Spot gold XAU= slipped 0.1% to $1,807.60 an ounce by 1156 GMT, trading between $1,802.80 and $1,815.63 during the session.

U.S. gold futures GCv1 eased 0.1% to $1,807.00.

Movements in gold are indicative of a "wait and see approach", said OANDA analyst Craig Erlam.

The testimony before the Senate Banking Committee on Tuesday and House of Representatives Financial Services Committee on Wednesday will be Powell's first since President Joe Biden and his fellow Democrats took control of the White House and Capitol Hill. are clearly going to be a number of questions around what (rising U.S. Treasury yields, stimulus and improved economic outlook) would mean for inflation, the Fed outlook and the risks associated with it," OANDA's Erlam said.

Bullion earlier rose to its highest since Feb. 16 at $1,815.63 as the dollar .DXY briefly touched a more than one-month low. However, the U.S. currency has since rebounded and was last up 0.1% against key rivals. USD/

Also tarnishing appeal for non-yielding bullion, benchmark U.S. Treasury yields US10YT=RR hovered near a one-year high scaled on Monday. US/

"Gold's trend seems to be to the downside, and there's no indication that it's reversing for now ... until we get a real spike in inflation expectations or a Fed that talks about controlling the yield curve," said IG Market analyst Kyle Rodda.

Rising yields tend to hurt bullion's appeal as an inflation hedge since they increase the opportunity cost of holding the metal.

Silver XAG= was down 0.9% at $27.92 an ounce, having earlier hit a three-week peak at $28.31. Platinum XPT= fell 1.9% to $1,248.93 while palladium XPD= lost 1.3% to $2,365.27.

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