Gold eased from its highest level in three months on Monday, ahead of Federal Reserve Chairwoman Janet Yellen’s two-day testimony to the Congress later in the week.
The precious metal climbed to a high of $1171.94 an ounce, while currently trading around $1171.35 from the session’s opening at $1171.87.
The yellow metal locked its third consecutive weekly gain the previous, where it retreated for the first time in seven sessions on Monday.
Haven demand as well as the drop in the dollar were the key factors behind the metal’s recent rally.
Still, there is uncertainty about global growth outlook amidst the slowdown in emerging markets, especially China.
The dollar index fell to a bottom of 96.25 last week, the lowest in nearly four months, while currently trading lower around 96.85, amid lower expectations the Fed would hike its interest rates next month.
Financial conditions have tightened significantly and the weakening global view could have “significant consequences” to the U.S. economy, Fed Dudley said last week.
The recent data from the United States have suggest an ease in recovery, thereby raising expectations the Fed was likely to adopt a cautious pace of rate hikes this year.
The dollar rose on Friday after a mixed U.S. non-farm payrolls data that signaled a lower than forecast pace of job creation in January and improvement in the unemployment rate.
The world’s biggest economy created 150,000 jobs last month, lower than estimates of 190,000, while the unemployment rate fell to 4.9 percent, the lowest since February 2008, the NFP showed.
Eyes will focus this week on Yellen’s semi-annual testimony to the Congress, as investors will look for clues whether policymakers would delay raising the borrowing cost in March.
It is worthwhile to mention that trading in Asia has been thin amid the closure of several regional markets on the Lunar New Year holiday.
