Gold price holds ground ahead of testimony by Fed's Powell

New York (Feb 27)  Gold prices held their ground on Tuesday as nervous investors  awaited testimony from the new chair of the U.S. central bank, but an analyst warned bullion was vulnerable to profit taking.

Spot gold was unchanged at $1,333.15 an ounce at 0950 GMT. U.S. gold futures added 0.2 percent to $1,335 per
ounce.

New Federal Reserve chief Jerome Powell is expected to take a neutral line in his testimony to the U.S. Congress, but if he aligns with the current FOMC consensus of three rate increases this year, that is more tightening than is priced in by markets. The dollar index fell before Powell's testimony, due at 1500 GMT. The index has rebounded 1.7 percent since falling to a three-year low of 88.25 on Feb. 16.
"Some in the market believe he is going to be bit less hawkish, so that's why the dollar is under pressure," said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam. "Once they realise that the policy's going to continue like it has, then the dollar should recover and gold move lower. With the positioning that's in place, we'll get profit-taking in long euros and long gold."

Boele expects gold to slip under $1,300 an ounce by the end of the quarter.
    "Initial support for the metal holds around $1,325-$1,330,
while resistance cuts in broadly between $1,340-$1,345," MKS
PAMP Group trader Sam Laughlin said in a note.
    "Investors will be keen to hear what Powell has to say
particularly over the balance sheet and his views on inflation,"
 ANZ analyst Daniel Hynes said.
    While inflation worries could spur safe-haven gold buying,
rising interest rates would pressure the metal because bullion
pays no interest.
    Meanwhile, global shares rose to three-week highs on Tuesday
as U.S. borrowing costs eased ahead of Powell's testimony
           .
    SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings rose 0.21 percent to
831.03 tonnes on Monday from 829.26 tonnes on Friday
            .
    Among other precious metals, silver dipped 0.1
percent at $16.64 an ounce.
    Palladium edged down 0.1 percent to $1,060.50 per
ounce. Platinum fell 0.3 percent at $996.90 per ounce.