PRECIOUS-Gold edges up on softer dollar; investors eye Powell's comments

BY Reuters | ECONOMIC | 02/06/23 08:23 PM EST

Feb 7 (Reuters) - Gold prices edged up on Tuesday, helped by a slight pullback in the dollar, with investors eyeing Federal Reserve Chair Jerome Powell's speech later in the day to gauge the U.S. central bank's monetary policy path.

FUNDAMENTALS

* Spot gold was 0.2% higher at $1,870.63 per ounce, as of 0046 GMT, after hitting its lowest since Jan. 6 in the previous session. U.S. gold futures rose 0.2% to $1,882.50.

* The dollar index eased 0.1%, making gold a more attractive bet for customers holding other currencies.

* Fed funds futures traders now see rates rising above 5% in May after data on Friday showed U.S. job growth accelerated sharply last month, which raised expectations that the Fed might keep interest rates higher for longer.

* Gold is sensitive to high interest rates, which lift the opportunity cost of holding non-yielding bullion.

* U.S. Treasury Secretary Janet Yellen said on Monday she saw a path for avoiding a U.S. recession, with inflation coming down significantly and the economy remaining strong, given the strength of the U.S. labour market.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.25% to 917.92 tonnes on Monday from 920.24 tonnes on Friday.

* Spot silver rose 0.1% to $22.28 per ounce, platinum edged 0.2% lower to $969.96 and palladium was little changed at $1,597.78.

DATA/EVENTS (GMT)

0030 Australia Trade Balance G&S (A$) Dec

0330 Australia RBA Cash Rate Feb

0700 Germany Industrial Output Dec

0700 UK Halifax House Prices Jan

0745 France Reserve Assets Total Jan

1330 US International Trade $ Dec

1700 Federal Reserve Chair Jerome Powell participates in interview hosted by the Economic Club of Washington (Reporting by Kavya Guduru in Bengaluru; editing by Uttaresh.V)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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