*
Powell's testimony to Congress on Tuesday and Wednesday
*
Spot gold may extend gains into $1,867-$1,876 range -
technicals
(Updates prices)
By Ashitha Shivaprasad
March 6 (Reuters) - Gold prices retreated on Monday from
an earlier 2-1/2 week high as traders awaited U.S. Federal
Reserve Chair Jerome Powell's testimony this week for hints on
future rate hikes.
Spot gold was down 0.3% at $1,849.90 per ounce by 1238 GMT after hitting its highest since Feb. 15 at $1,858.19. U.S. gold futures edged up 0.1% to $1,855.60. The dollar index gained 0.1%, making greenback-priced bullion less affordable for overseas buyers. All eyes are on Powell's testimony to Congress on Tuesday and Wednesday, followed by the February U.S. jobs report due on Friday.
"Currently, gold is in a wait-and-see mode," said UBS analyst Giovanni Staunovo. "There's unlikely to be a change of script from Powell, reiterating the need for further rate hikes to bring inflation under control."
Although gold is considered a hedge against inflation, rising interest rates tend to decrease the appetite for zero-yield bullion. San Francisco Fed President Mary Daly on Saturday said that if data continue to come in hotter than expected, interest rates will need to go higher, and stay there longer.
On Sunday, top bullion consumer China set a modest target for economic growth this year of around 5% as it kicked off the annual session of its National People's Congress.
Spot gold may extend gains into a range of $1,867-$1,876 per ounce as it has more or less broken resistance at $1,853, according to Reuters technical analyst Wang Tao. Spot silver fell 0.6% to $21.12 per ounce. "Silver demand in India is likely to be lower this year as most pent-up demand has been satisfied," Heraeus Precious Metals analysts said in a note. "However, it is entirely possible that demand will remain strong and in the upper range of pre-pandemic levels." Platinum slipped 1% to $967.96 and palladium lost 2.5% to $1,416.86. (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Jan Harvey, Kirsten Donovan and Susan Fenton)
