Gold settles higher even as dollar climbs to five-week height

Gold futures titled higher in American trade even as the dollar index rebounded from December 17, 2014 lows for the seventh session out of nine, following earlier data from China, the world's largest metals consumer, and the US. 

As of 02:51 GMT, gold futures due on April 15 rose 0.20% to $1,321.30 an ounce form the opening of $1,318.60, while the dollar index advanced 0.15% to 90.49 from the opening of 90.36, marking January 22 highs. 

Earlier Chinese data showed the manufacturing PMI fell to 50.3 in February from 51.3, missing expectations of 51.2 while the services PMI slipped to 54.4 from 55.3. 

Earlier US data showed GDP growth slowed down to 2.5% in the fourth quarter of 2017, matching expectations and down from the preliminary reading's 2.6% growth, and the third quarter's 3.2% growth rate. 

GDP prices slowed down as well to 2.3% in the second reading, missing expectations of 2.4%, while Chicago PMI slowed down to 61.9 in February from 65.7 in January, missing expectations of 64.2. 

Federal Reserve Chair Jerome Powell testified on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC, on Tuesday, where he expressed admiration for former Chair Janet Yellen's work to strengthen the economy and normalize the balance sheet, lauding her for helping to smooth out the transition and provide continuity in monetary policy. 

 Powell expected the Fed to continue tightening monetary policy gradually, while pointing to economic outlook as strong, asserting the importance of balancing the push of inflation just towards the target and not beyond it, adding that labor strength will underpin spending and income. 

Powell dismissed concerns of a big recession for the time being, pointing to economic data as proof of the economy's strength and upward path of inflation and growth. 

Powell asserted the risks of waiting too long before increasing interest rates, while expecting higher wages as the unemployment rate declines and the labor market tightens. 

On Thursday, Powell will testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC, thus completing the second half of his Congress testimony. 

Gold holdings at SPDR Gold Trust, the world's largest gold-backed investment fund, settled unchanged on Tuesday at 831.03 tonnes, the highest since January 31, after rising about 3%, or 23.63 tonnes in 2017.