PRECIOUS-Gold hovers near 3-month peak; focus shifts to Powell testimony

Credit: REUTERS/Petr Josek Snr

March 5 (Reuters) - Gold prices clung to a three-month peak on Tuesday, supported by softer U.S. manufacturing and construction spending, while investors awaited Federal Reserve Chair Jerome Powell's testimony and key jobs data due this week.

FUNDAMENTALS

* Spot gold XAU= edged 0.1% lower to $2,112.39 per ounce, as of 0230 GMT, but hovered near Monday's levels of $2119.69, its highest since Dec. 4. U.S. gold futures GCcv1 fell 0.3% to $2,120.50.

* London's gold price benchmark hit an all-time high of $2,098.05 per troy ounce at an afternoon auction on Monday, surpassing the previous record of $2,078.40 set on Dec. 28, the London Bullion Market Association (LBMA) said.

* Market focus is on Fed Chair Powell's two-day congressional testimony on Wednesday and Thursday.

* Other economic releases due this week that could move the needle on U.S. rate cut expectations include Institute for Supply Management (ISM) services data at 1500 GMT, and the Job Openings and Labor Turnover Survey (JOLTS) on Wednesday, and the non-farm payroll report on Friday.

* Data last week showed U.S. manufacturing slumped further in February and inflation gradually easing, while consumer sentiment stood weak.

* The Fed is under no urgent pressure to cut rates given a "prospering" economy and job market, Atlanta Fed President Raphael Bostic said on Monday in remarks that highlighted the risk inflation may get stuck above the central bank's 2% target or be sent even higher by "pent-up exuberance."

* Traders now see a 65% chance for a June U.S. rate cut, according to LSEG's interest rate probability app.

* Lower interest rates boost the appeal of non-yielding bullion.

* Spot platinum XPT= fell 0.7% to $890.90 per ounce, and palladium XPD= dropped nearly 1% to $951.12, while silver XAG= fell 0.9% to $23.68.

DATA/EVENTS AHEAD (GMT) 0500 India HSBC Services PMI Feb 0600 Russia S&P Global Services PMI Feb 0850 France HCOB Services, Composite PMI Feb 0855 Germany HCOB Services, Composite PMI Feb 0900 Euro zone HCOB Services, Composite PMI Feb 0930 UK S&P Global Composite PMI Feb 0930 UK Reserve Assets Total Feb 1300 Brazil S&P Global Services, Composite PMI Feb 1445 US S&P Global Services, Composite PMI Feb 1500 US Factory Orders MM Jan 1500 US ISM Non-manufacturing PMI Feb

1700 US Fed's Barr speaks --

(Reporting by Harshit Verma in Bengaluru; Editing by Sherry Jacob-Phillips)

((Harshit.Verma@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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