Gold prices were slightly higher in European morning trade on Tuesday, as investors awaited congressional testimony by Federal Reserve Chair Janet Yellen for clues to the pace of the central bank's interest rate increases.
Gold for April delivery on the Comex division of the New York Mercantile Exchange inched up $2.55, or about 0.2%, to $1,228.35 a troy ounce by 3:15AM ET (08:15GMT), after losing $10.10, or around 0.8%, a day earlier.
Prices of the yellow metal fell to a one-week low of $1,220.30 on Monday as investors piled into the U.S. dollar and stocks amid optimism over President Donald Trump's economic agenda.
Since the election, the Fed has taken a back seat to the market optimism around the pro-growth tax and stimulus policies of President Trump.
Fed Chair Janet Yellen is set to deliver her semi-annual monetary policy testimony on the economy before Senate and House committees in Washington DC.
Yellen is scheduled to testify on the economy before the Senate Banking Committee at 10:00AM ET (15:00GMT) Tuesday. On Wednesday, she will appear in front the House Financial Services Committee also at 10AM ET.
Her comments will be monitored closely for any new insight on policy and the timing of when it might raise interest rates.
Investors will also keep an eye out on a number of U.S. economic reports in the week ahead, including the January producer price index on Tuesday, the January consumer price index and retail sales on Wednesday and housing-related data on Thursday.
The Fed left borrowing costs unchanged earlier this month and gave no firm signal on the timing of its next rate hike.
Fed fund futures are pricing in a less than 15% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool, while odds of a June increase was seen at around 60%.
The U.S. central bank has previously projected three rate increases this year. However, traders remained unconvinced, with markets continuing to price in just two rate hikes during the course of this year.
Also on the Comex, silver futures for March delivery tacked on 2.2 cents, or 0.1%, to $17.84 a troy ounce.
Meanwhile, platinum added 0.1% to $1,001.10, while palladium rose 0.5% to $778.65 an ounce.
Elsewhere in metals trading, copper futures jumped 1.2 cents, or about 0.4%, to $2.795 a pound.
Combined, the mines produces roughly 10% of the world's total copper supply.
