Gold Wavers Ahead of Inflation Data and Warsh Speech

Gold prices wavered on Tuesday as investors awaited key inflation data and a speech from Federal Reserve Chair Kevin Warsh. The precious metal market participants held off on major moves, despite a weaker dollar and falling oil prices.

The U.S. Treasury yields extended their decline to a second straight day, with the fixed-income space grabbing the spotlight. A CNBC report said Washington could use its near $1 trillion Treasury General Account (TGA) to fund increased buybacks of longer-term bonds. This move was seen as an unsustainable short-term solution to a bigger problem fueled by jitters about Washington's ballooning fiscal debt.

Last week, U.S. debt crossed $40 trillion, leading to an undoing of all the gains triggered by the Treasury's announcement. Rising bond yields act like interest rate hikes, driving up borrowing costs for consumers and businesses, which in turn tends to strengthen the dollar. However, investors look to move capital out of fiat currencies and into hard assets such as gold or cryptocurrency - a strategy known as the debasement trade.

Gold prices surged more than 5% last week, while crypto rallied. The dollar slid. Adam Turnquist, chief technical strategist at LPL Financial, said, 'While Treasury intervention may help cap upside pressure in rates, several other tailwinds for gold have more recently emerged.' He noted that investor positioning appears cleaner than it was in January and the dollar has retreated into its prior trading range.