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Gold prices have reached their highest level for more than a week on Thursday as the dollar pulls out of its summit by several weeks after comments by Federal Reserve Chairman Jerome Powell reinforced expectations of a reduction in interest rates later this month.
Spot gold was up 0.4% to $ 1,423.80 an ounce from 11:02 am GMT, after reaching its highest level since July 3 at $ 1,426.
Gold futures in the US jumped 1.1% to $ 1,427.40 an ounce.
In an appearance before his congressional supervisors on Wednesday, Powell confirmed that the US economy was still threatened by disappointing industrial activity, controlled inflation and a boiling trade war.
Powell said the central bank was ready to "do the right thing".
The minutes of the Fed's previous monetary policy meeting added that, in his testimony, the Fed's speech showed that many politicians thought that more stimulus would be needed, reviving the speculation of aggressive rate reduction.
The dollar index fell after a three-week high, and the US Treasury yield curve came on the heels of Powell's comments.
Money market futures have risen by about 30% over the chances of the Fed cutting rates by 50 basis points in its next monetary policy review on July 30th and 31st – a scenario that was quoted after strong US data on employment released Friday.
Falling US interest rates put pressure on dollar and bond yields, adding to the appeal of unproductive bullion.
Asian stocks rose Thursday after Powell's comments.
SPDR Gold Trust, the largest gold-backed exchange-traded fund in the world, said its holdings rose 0.81 percent to 800.54 tons on Wednesday, from 794.08 tons on Tuesday.
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