Gold prices rose on Monday by 1 percent on the back of the decline in the U.S. dollar against major currencies, as markets await the Fed Chairman's testimony to the US Congress this week.
On the other hand, intraday gold prices rose to a four-session high of $1340.97 an ounce, after opening at $1327.84 an ounce, while currently trading at $1337.99.
In contrast, the dollar fell against the major currencies, with the dollar index reaching a low of 89.41 and currently trading at 89.66.
The yield on the 10-year U.S. Treasury bonds plunged to a one-week low of 2.839, helping gold prices to rise today given the inverse relationship between them and the yield on U.S. bonds.
This week, markets will eye Federal Reserve Chairman Jerome Powell's first testimony before Congress, as he outlines his monetary policy and interest rate forecast.
In addition, eyes will focus on a second GDP reading from the U.S. GDP, which is expected to signal the world’s biggest economy grew an annualized 2.5 percent in the fourth quarter, down from preliminary reading of 2.6 percent.
Investors have decided to diversify their investments since the beginning of the week. Global equity indices are trading positively as well as the Japanese yen, which is a safe haven and alternative investment in the markets.
On the other hand, investors sold the U.S. dollar and treasuries,
especially as the stock markets offer opportunities to buy after the sharp
decline in the past period.