Gold starts the week higher as dollar pulls back

Gold prices pushed higher Monday, rising as the dollar and bond yields pulled back ahead of a busy week for appearances by Federal Reserve officials.
April gold GCJ8, +0.68% rose $11.90, or 0.9%, to $1,342.20 an ounce, and March silver SIH8, +0.98% rose 21 cents, or 1.3%, to $16.69 an ounce. Gold slipped 1.9% last week, while silver fell 1.3%. Gold’s weekly drop was the biggest since the week ending Dec. 8, 2017.

“There has been a strong start to the week from the gold bulls and with the market retaining its positive medium term outlook, there seems to be a wave of buyers looking to use this recent correction as a chance to re-enter the market again,” said Richard Perry, analyst at Hantec Markets, in a note to clients.

Gains for precious metals came as the dollar, gauged by the ICE Dollar Index DXY, -0.29% , dropped 0.4% to 89.571, fell in tandem with the benchmark 10-year Treasury note yield TMUBMUSD10Y, -0.83% which traded at 2.862%, slipping further from a level of 2.871% seen late Friday.

Precious metals, often pegged to dollars, tend to rise when the buck weakens because a falling dollar can make buying those assets cheaper for investors using weaker monetary units.
Expectations that there could be an additional hike helped push the 10-year yield closer to the 3% mark last week, though that yield has pulled back in recent days.

An ease in yields came after the Fed’s semiannual monetary-policy report, released Friday, signaled an overall upbeat view on the U.S. economy, and discussed a pickup in inflation toward the end of 2017, but offered few fresh hints regarding more aggressive policy action.

Investors will be keeping a close eye on Federal Reserve Chairman Jerome Powell this week, who will make the first of two rounds of testimony before Congress. Many will be looking to see if he offers any hints about whether the Fed may hike four times this year instead of an expected three.

Read: Fed and new boss Jerome Powell are on inflation watch as anxious investors look on
Ahead of that on Monday, St. Louis Fed President James Bullard will give a speech on the economy and monetary policy at the National Association of Business Economics in Washington at 8 a.m. Eastern. Fed Vice Chairman Randall Quarles will speak at the same venue at 3:15 p.m. Eastern.

In other metals, March copper HGH8, +0.06% rose 2 cents, or 0.5%, to $3.23 a pound.
April platinum PLJ8, +0.46% rose $10.60, or 1.1%, to $1,009.50 an ounce, while March palladium PAH8, +0.97% jumped $13.20, or 1.3%, to $1,054.35 an ounce.