Spot gold was up 1% at $2,508.88 an ounce by 10:42 a.m. ET (1442 GMT), but had touched a record high of $2,531.60 on Tuesday. US gold futures rose 1.2% to $2,546.20.
Powell said “the time has come” for the US central bank to cut interest rates and inflation approaches the Fed’s 2% target, providing clear support for imminent policy easing.
The dollar index fell 0.6% against its rivals, while the benchmark US 10-year yield also fell following Powell’s speech, making gold more attractive to holders of other currencies.(USD/)(US/)
“Asset markets are responding well, at least initially, to Powell’s general, but somewhat open comments that it’s time to adjust policy,” said Tai Wong, an independent metals trader based in New York.
“Gold continues higher ahead of September Fed meeting and updated dot plot showing how many cuts are likely this year.”
Low US interest rates also generally increase the relative appeal of zero-yield bullion.
Expectations of a rate cut could push gold into the $2550-$2600 range, said Alex Abkarian, chief operating officer at Allegiance Gold.
Traders are expecting a 67.5% chance of a cut of 25 basis points in September, while 32.5% expect a further cut of 50 bps.
Silver rose 2.1% to $29.60 an ounce and was up about 2.1% on the week.
India’s silver imports are about to double this year due to rising demand from solar panel and electronics manufacturers, leading importers said.
Platinum was up 1.5% at $958.35 and palladium was up 1.6% at $947.50.
(Reporting by Anushree Mukherjee and Brijesh Patel in Bengaluru; Editing by Sharon Singleton and Vijay Kishore)
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