Gold prices fell in early trading on Wednesday but held above $2,100 an ounce, after rising bets on a U.S. interest rate cut in June pushed the precious metal to a record high in the previous session ahead of testimony from Federal Reserve Chairman Jerome Powell.
U.S. services sector growth slowed slightly in February amid a decline in employment and a larger-than-expected drop in new orders for U.S.-made goods in January.
Ten-year U.S. Treasury yields hovered near one-month lows, boosting demand for non-yielding bullion.
According to LSEG's interest rate forecast app, traders see a 71 percent chance of the U.S. central bank cutting rates in June, up from 65 percent on Tuesday morning.
Lower interest rates will increase demand for non-yielding bullion.
Investors are focused on the first day of Powell's semi-annual testimony before Congress on the state of the US economy.
Bitcoin, the world's largest cryptocurrency, surged to a record high last night before falling sharply.
Data last week showed U.S. manufacturing fell further in February, inflation eased gradually and consumer sentiment remained weak.
Update prices
Spot gold was down 0.2 percent at $2,124.46 an ounce by 0229 GMT. U.S. gold futures were down 0.4 percent at $2,132.90.
Spot gold hit a record high of $2,141.59 an ounce overnight Tuesday, rising for a fifth straight session.
As for other precious metals, platinum fell by 0.1 percent to $879.46 per ounce, palladium fell by 0.2 percent to $946.51, and silver fell by 0.4 percent to $23.59 per ounce.
