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Gold edges higher as the greenback eases ahead of Powell's speech

Gold prices surged, halting a 2-day losing streak as the dollar declined from recent peaks, with investors awaiting U.S. Federal Reserve Chairman Jerome Powell’s speech later this week, although a rally in equity markets limited the metal’s upside.

Spot gold was trading 0.2 percent higher to $1,932.52 per ounce by 0627 GMT, having hit a low of $1911.58 on Friday, its lowest since August 12. U.S. gold futures gained 0.05 percent at $1,939.60.

Asian stock markets surged following a fresh Wall Street rally, while investors cheered signs of progress in U.S.-China trade negotiations.

Market risk sentiment improved following reports that top U.S and Chinese officials see progress being made in resolving concerns around the Phase 1 trade deal reached between the two countries in January. On the call, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He.

On Sunday, the U.S. Food and Drug Administration authorized the use of blood plasma from recovered COVID-19 patients as a treatment option. Demand for riskier assets was also supported by a Financial Times report which stated that U.S. authorities were considering fast-tracking approval for a COVID-19 vaccine being developed by AstraZeneca and Oxford University.

Investors now await U.S. Federal Reserve Chairman Jerome Powell’s speech on Thursday at the Kansas City Fed’s annual symposium, where he is expected to address the future approach to inflation and the central bank’s efforts to revamp its approach to monetary policy.

The greenback against a basket of currencies traded 0.1 percent down at 93.22, having touched a high of 93.47 on Friday, its highest since August 12. The U.S. Treasury yields surged, with the benchmark 10-year note yield trading at 0.664 percent.

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