Investing.com - Gold prices edged lower to start the week on Monday, pulling further back from a 17-month high as the U.S. dollar recovered somewhat from last week's turbulence, prompted by conflicting comments from the Trump administration at Davos.
Comex gold futures slumped around $7.00, or 0.5%, from the last session's closing price to $1,345.60 a troy ounce by 2:55AM ET (0755GMT). It climbed to its highest since Aug. 2016 at $1,365.40 last Thursday.
Meanwhile, silver futures shed 10.6 cents, or 0.6%, to $17.33 a troy ounce.
The dollar index, which gauges the U.S. currency against a basket of six major rivals, rose almost 0.3% to 89.10, extending its rebound from a three-year nadir of 88.25 set on Thursday.
The greenback fell last week following comments from U.S. Treasury Secretary Steven Mnuchin about how a weaker currency benefits trade. The currency later edged up after President Donald Trump said Mnuchin had been misinterpreted, but subsequently resumed its slide.
U.S. Treasuries price fell, pushing up the benchmark 10-year yield to as high as 2.708%, its loftiest level in nearly four years.
Global financial markets will focus on this week's Federal Reserve policy meeting, which will be the last under the leadership of Janet Yellen before she hands the chairmanship over to Jerome Powell.
There are also some major data releases in the coming week, as the calendar rolls to February from January, with Friday's monthly employment data in the spotlight.
The majority of economists believe that the Fed will hike rates in March, followed by another hike in June, with a third move higher arriving in December.
Gold is highly sensitive to rising rates, which increase the opportunity cost of holding nonyielding bullion.
Another headliner this week will be President Donald Trump's State of the Union address on Tuesday. The theme of Trump's address will be "building a safe, strong and proud America," a senior administration official told reporters on Friday.
According to the White House, the speech will focus on five main policy areas: jobs and the economy, infrastructure, immigration, trade and national security.
In other metals action, palladium prices inched down 0.2% to $1,082.70 an ounce.
Sister metal platinum meanwhile dipped 0.6% at $1,012.30 an ounce.
March copper tacked on 0.8% to $3.223 a pound.