Gold traded little changed on Monday as investors stayed on the sidelines ahead of a presentation by the US Federal Reserve chief later in the week that will be scoured for clues on the central bank’s attitude to another round of quantitative easing.
Gold has been sensitive to the Fed’s stance on monetary stimulus this year and particularly to the impact of such a move on the dollar, which has consistently trumped bullion as the more-sought-for destination for safety amid the festering euro zone debt crisis that has sapped market liquidity.
Spot gold was little changed at $1,589.75 an ounce by 0634 GMT, after rallying 1 percent on Friday.
US gold futures contract for August lost 0.1 percent to $1,589.70.
Technical analysis, however, suggested spot gold could retrace to $1,570 an ounce during the day, said Reuters market analyst Wang Tao.
The correlation between the dollar and gold stood at -0.68, steady from Friday and the strongest inverse correlation in nearly three months. A reading of -1 suggests a perfect inverse correlation in which one asset rises and the other drops.