US Federal Reserve Chief Janet Yellen
Janet Yellen. Reuters

Gold struck a three-month high and global shares traded higher on 11 February as investors bet that US Federal Reserve chief Janet Yellen would refrain from shocking the markets in her debut appearance in front of US lawmakers.

Fed Chair Janet Yellen is likely to face tough questions on the state of the US economy, the labour market and the future pace of the Fed's stimulus tapering when she appears before the House Financial Services Committee on Tuesday.

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Hope that US interest rates would remain near zero for some more time was enough to drive gold 0.8% higher to 1,283.95.

Meanwhile, the dollar was a tad lower against the euro at $1.3673.

The FTSEurofirst 300 index of European shares rose 0.6%.

US stock futures also traded higher with the S&P 500 e-mini contract up 0.4%.

The MSCI All-Country World Index gained 0.3%.

Yellen's testimony will be released at 13:30GMT. Her hearing before the Financial Services Committee is scheduled to begin at 15:00 GMT.

The Fed chief will appear before the Senate's Banking Committee on 13 February.

"The Fed will want to hold the market's hand as much as possible over this period so they will be extremely keen to try and comfort the market in any way they can," said Stewart Richardson, partner at macro hedge fund RMG Wealth Management.

"At the moment this is taking the form of 'don't worry interest rates will remain low for an extended period'," Richardson told Reuters.

Standard Chartered said in a note to clients: "In theory, Fed Chair Janet Yellen's congressional testimony on Tuesday (statement released at 08:30 ET, testimony at 10:00) should not bring too many surprises: Yellen is expected to follow the script - in particular the 29 January meeting statement, and maintain a glass-half-full-glass-half-empty tone."

"She will probably say the recovery is getting firmer - she is likely to dismiss recent uneven data as weather-related - which would allow the Fed to continue QE tapering; while at the same time highlighting continued elevated slack and low inflation, making the Fed in no rush to hike rates."

"In practice, congressional testimony can include strong hints (such as Bernanke's "tapering to start within the next few meetings" in May 2013). We expect Yellen to start paving the way for a revamp of the Fed's forward guidance," the British bank added.

Commerzbank Corporates & Markets said in a note to clients: "Today attention is back on the US central bank again. Janet Yellen will have her first testimony in front of the House of Representatives Financial Service Committee where she will have to provide an assessment of the economic situation and US monetary policy. After only one week in office it is unlikely that she will be presenting new essential insights to the market and as a result the effect on the USD exchange rates is likely to be limited."

"However, her comments on the latest labour market report will be interesting. On the one hand the employment change was disappointingly low again, on the other hand the unemployment rate has more or less reached the target level of 6.5% previously communicated by the FOMC."

"The question arises whether the Fed will now find additional criteria for its promise of keeping interest rates at low levels or whether it will drop the threshold level altogether. It is also possible that it now focuses attention on low inflation, thus anchoring rate expectations. In any case, should Yellen sound dovish on this front that is likely to further support EUR/USD while the pair is however likely to increasingly run out of steam in the area of 1.3700," the German bank added.