Precious-Gold resumed its rally for a third straight session on Tuesday, hovering near 3-month high, on expectations may Fed may pause or slowdown the pace of stimulus cut, where eyes will focus today on Yellen’s testimony.
Investors are now in favor of seeing a change in the Fed’s stimulus reduction plan amid signs of deterioration in the labor market.
American employers added 113,000 jobs last month, lower than forecast of 185,000, the nonfarm payrolls figures showed last week.
As of 15:00 GMT, the new Fed chief Janet Yellen will deliver her first Congressional Testimony, where she will probably be asked about the undergoing economic situation and plans for the bank’s bond purchases program.
The recent unpleasant jobs report raised speculations the Fed may reconsider the pace of stimulus reduction, given Yellen’s intention to hold stimulus for longer period to bolster recovery.
Other analyst see that the Fed may continue with its stimulus cut smoothly as unemployment rate fell near the Fed’s threshold to 6.6 percent from 6.7 percent the month prior.
The Fed decided to slash its monthly bond purchases for a second month in January by $10 billion to $65 billion after signs of economic progress.
The focus would remain on U.S. data, especially as Yellen took charge of the Fed’s presidency, given her intention to keep stimulus for longer time to reinvigorate recovery.
On the physical side, the yellow metal has found some support from the return of Chinese markets, the largest bullion buyers in the world, after the week-long Lunar New Year holiday.
Gold is looking for its seventh weekly gain out of eight weeks this week, but meanwhile it faces resistance at $1283.50, which represents 38.2 percent Fibonacci Retracement to the upside trend that ended at the all-time high of $1920.92.
The yellow metal, meanwhile, is trading around $1285.11 an ounce after hitting a high of $1287.33 and a low of $1273.51.
The U.S. dollar dropped against a basket of major currencies to hover around 80.65 after opening at 80.78.
Crude oil for March’s delivery inched up to trade around $99.96 a barrel after touching a record high of $100.51 yesterday.