Gold hovers near 2-week low as dollar jumps on Fed's Powell nomination

Gold prices edged up on Tuesday but hovered close to their lowest level in more than two weeks hit in the previous session, as the dollar gained on US President Joe Biden's nomination of Federal Reserve Chair Jerome Powell for a second term.

Fundamentals

• Spot gold rose 0.2% to $1,809.40 per ounce by 0048 GMT, after sliding 2.1% to its lowest since Nov. 5 on Monday. US gold futures gained 0.2% to $1,809.60.

• The dollar index held near a 16-month peak after Biden on Monday nominated Fed Chair Powell for a second four-year term, bolstering bets the central bank might raise interest rates sooner to curb growing inflation.

Spot gold may pull back into $1,817-$1,831 range; cautiously bearish

• A stronger dollar increases bullion's cost to buyers holding other currencies.

• Both Powell and Brainard need to be confirmed in their Fed leadership roles by the Senate, currently controlled by Biden's Democratic party but closely divided.

• Gold has benefited from easy monetary policy introduced during the pandemic, but any hike in interest rates should reduce the non-interest bearing metal's appeal as higher interest raises bullion's opportunity cost.

• A resurgence of coronavirus cases and a jump in inflation do not at this point warrant a change in the European Central Bank's plans to taper its bond purchases in March, ECB policymaker Francois Villeroy de Galhau said on Monday.

• US home sales unexpectedly rose in October, though higher prices amid tight supply continued to sideline first-time buyers from the market.

• China's economy faces new downward pressures but authorities should avoid rolling out economic measures in a "campaign-like and aggressive" way, Premier Li Keqiang said.

• Spot silver rose 0.4% to $24.25 per ounce. Platinum gained 0.4% to $1,015.51 and palladium rose 1.3% to $1,978.97.