By Gina Lee

Investing.com – Gold was up on Tuesday morning in Asia against the dollar's fell below the $92 mark. Investors digested comments by U.S. Federal Reserve chair Jerome Powell that the inflation will be transitory while await Powell’s speech later in the day.

Gold futures were up 0.32% to $1,788.65 by 12:17 AM ET (4:17 AM GMT).

Although inflation had increased, it will move back toward Fed’s 2% target once supply imbalances resolve, Powell said in written remarks prepared for his Tuesday testimony before congress.

“Inflation has increased notably in recent months…as these transitory supply effects abate, inflation is expected to drop back toward our longer-run goal,” he added.

Investors now await the hearing to get clues on the pace of U.S. economic recovery from COVID-19 and the outlook for the Fed monetary policy.

Gold picked up on Monday after the biggest weekly fall in its worst week in 15 months, as the Fed hinted earlier-than-expect interest rate hikes and tightening of its asset purchase program as it handed down its latest policy decision during the previous week. The yellow metal rebounded a little as investors bet the tightening will be very gradual.

“Gold rose overnight as the U.S. dollar retreated and that (upbeat) sentiment continues in Asia this morning, as regional investors hurry to New York’s overnight lead,” Jeffrey Halley, senior market analyst at OANDA, told Reuters.

However, some investors remained cautious.

“Despite the rebound, gold prices were being traded mostly within last Friday’s chart pattern, a pattern that is more reflective of a pause and indecision,” Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

Investors also await a Bank of England policy decision, to be handed down on Thursday.

In other precious metals, silver and palladium edged down 0.2%, while platinum climbed 0.7%.

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