Gold slips as dollar strengthens ahead of Powell's testimony

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USA stocks hit a record last week and a bond rally took yields to multiyear lows amid expectations the Fed will lower interest rates by at least a quarter of a percentage point at its July meeting.

ENERGY: Oil prices were fairly steady with benchmark USA crude down 3 cents to $57.48 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price worldwide oils, was unchanged at to $64.23. The probability of a cut remains at 100%, with a 96% chance of being lowered by 25 basis points, according to the CME FedWatch tool. The euro was down 0.12 percent at $1.1210.

The dollar index, which measures the greenback against a basket of major currencies, eased from a 2-1/2 week top of 97.443 to last quote at 97.251. The pound declined 0.10 percent at $1.2510, not far from the $1.2481 low reached on Friday. "The data this week had been consistent with a continued slowdown in economic growth, however, don't but look weak enough to convince the Fed to cut rates of interest instantly", the analysis firm wrote on Friday.

Beyond that, policymakers at the Federal Open Market Committee meeting this month will discuss whether the US needs an "insurance cut" amid a slowing global economy, trade frictions and low inflation. However, the 224,000 increase in USA nonfarm payrolls recorded in June has diminished the prospects of 0.5 percentage point interest rate reduction from the Fed this month.

Investors will be listening closely for any hints on the central bank's interest rate policy on Wednesday and Thursday, when Powell delivers the Fed's semi-annual monetary report to Congress. "Some profit-taking at higher levels is also the reason behind the fall in gold prices", said Kunal Shah, Head of Commodities Research at Nirmal Bang.

As for other precious metals, silver for September delivery was up 4.9 cents, or 0.33 percent to close at 15.05 dollars per ounce. Trump also said that other countries were looking to take advantage of the US knowing that the Fed "doesn't have a clue".

Friday's payrolls report for June shifted the debate from how much to cut interest rates this month to whether to move at all.

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The Dow is up 3,478.68 points, or 14.9%.

The U.S. Treasury yield curve flattened on Monday, after stronger-than-expected employment data on Friday led traders to significantly reduce bets on an aggressive 50 basis point interest-rate cut in July.

Germany's 10-year yield was flat at -0.366%.

Spot gold fell 0.2 per cent to US$1,397.03 an ounce. US gold futures settled at $1,400 per ounce.

Oil prices steadied on Monday as tensions over Iran's nuclear program countered concerns about whether slowing global economic growth would hit oil demand.

Oil prices are fluctuating with West Texas Intermediate crude down 0.1% at $57.40, and Brent crude up 0.2% at $64.30.