Gold gains as dollar weakens ahead of Yellen speech

Spot gold rose 0.2% to $1,840.81 per ounce

  
A 500 gram gold bar is seen at the Kazakhstan's National Bank vault in Almaty, Kazakhstan September 15, 2017.

A 500 gram gold bar is seen at the Kazakhstan's National Bank vault in Almaty, Kazakhstan September 15, 2017.

REUTERS/Mariya Gordeyeva

Gold edged higher on Tuesday from the last session's 1-1/2 month low as the dollar eased off highs ahead of U.S. Treasury Secretary nominee Janet Yellen's speech later in the day, when she is expected to raise the case for more fiscal spending.

Spot gold rose 0.3% to $1,842.46 per ounce by 1024 GMT, recovering from its lowest since Dec. 2 at $1,809.90 hit on Monday. U.S. gold futures gained 0.7% to $1,842.70.

"The dollar has weakened a tad, yields have not moved any higher, which should be helpful but the market is in a bit of loss of appetite for gold," said Saxo Bank analyst Ole Hansen.

"The market is lacking confidence at this point and in order for that to resume we need to see renewed focus on inflation as being a driver and we need to see the recent dollar strength start to fade."

The dollar index slipped from a four-week high hit in the previous session, while benchmark 10-year Treasury yields were range-bound, but held above 1%.

Investors await Biden's inauguration on Wednesday mired in security concerns after the Jan. 6 assault on the U.S. Capitol by supporters of President Donald Trump.

Also on investors' radar is Yellen's testimony in which she is expected to affirm that the U.S. does not seek a weaker dollar and that the government must "act big" with its virus relief package. 

Euro zone finance ministers pledged continued fiscal support for their economies, while focus in the United States remains on Biden's $1.9 trillion stimulus package proposal. 

"Global central bank members are cognizant that even though equity markets are doing well, the underlying economy is still very weak and stimulus measures are needed," said Michael Langford, director at corporate advisory AirGuide.

Silver eased 0.1% to $25.31 an ounce. Platinum gained 1.6% to $1,095.98 and palladium was up 0.1% to $2,374.35.

(Reporting by Asha Sistla and Sumita Layek in Bengaluru, additional reporting by Swati Verma, editing by Nick Macfie) ((Asha.Sistla@thomsonreuters.com; If within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2808; Reuters Messaging: Reuters Messaging: asha.sistla.thomsonreuters.com@reuters.net))

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