Gold dips as dollar regains ground, all eyes on Fed speakers

Gold prices erased earlier gains to trade lower on Monday due to an uptick in the dollar, while investors looked to Federal Reserve policymakers' speeches this week for signals on their approach to inflation.

Spot gold eased 0.1pc to $1,947.19 per ounce by 0810 GMT. U.S. gold futures fell 0.5pc lower to $1,953.

The dollar index bounced up 0.1pc against its rivals, making gold more expensive for holders of other currencies.

Investors are now awaiting speeches by Fed committee members, including Chairman Jerome Powell, who will appear before Congressional committees later this week.

"The focus on Jerome Powell will be how much he is going to try to sway the Senate to provide more stimulus," said Stephen Innes, chief market strategist at AxiCorp.

More stimulus in the United States could lead to a weaker dollar and that would be positive for gold, he added.

Gold has surged about 29pc this year as governments and central banks worldwide released unprecedented stimulus measures to revive their coronavirus-battered economies.

But rising economic concerns with resurgence of COVID-19 cases globally cushioned some of bullion's losses.

Major European cities announced restrictions again, while worldwide cases crossed 30.78 million.

"Gold is likely to trade range-bound between $1,930 and $1,970 during the week," said Jigar Trivedi, commodities analyst at Mumbai broker Anand Rathi Shares.

Development of a coronavirus vaccine and dollar strength could trigger a correction in gold in the near term, he added.

Meanwhile, data from the Commodities Futures Trading Commission showed that speculators raised their net long position in COMEX gold by 10,622 contracts to 165,251 in the week ended Sept. 15.

Among other precious metals, silver fell 0.5pc to $26.62 per ounce, platinum rose 0.4pc to $931.18 and palladium inched 0.1pc higher to $2,358.48.