Gold prices were little changed Tuesday with investors eager to glean fresh insights in congressional testimony from Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen later in the session.
The pair of regulators are set to provide at noon the first of two days of testimony about the health of the U.S. economy as America wrestles with the impact of the COVID-19 pandemic.
“Both metals are likely to tread water this morning ahead of midday remarks by two major U.S. economic officials,” wrote Jim Wyckoff, senior analyst at Kitco.com, in a daily research note.
Trading in the precious metals come as the 10-year Treasury note yield was at 1.65%, off 4 basis points from Monday. Shrinking yields can make gold comparatively more attractive set against precious metals that don’t offer a coupon.
However, a strengthening of the U.S. dollar was likely creating some headwinds for bullion, making the dollar-pegged asset more expensive for overseas buyers.
The dollar was up 0.4%, as measured by the ICE U.S. Dollar Index DXY, +0.40%.
Optimism about the speed of the recovery from the pandemic and the possibility of rising inflation have left investors skeptical about the Fed’s plans for interest rates and bond purchases. That has made Powell and Yellen’s testimony a more highly anticipated event as investors reassess their expectations for a fast and widespread global recovery.
Rising COVID-19 cases in Europe, however, and recent extensions to lockdowns in Germany, France and Italy may also provide some near-term lift to bullion.