(Reuters) - Gold prices rose to a one-week high on Thursday, extending gains from the previous session after U.S. Federal Reserve Chairman Jerome Powell’s dovish remarks bolstered expectations of an interest rate cut this month.
Spot gold rose 0.1% to $1,419.64 per ounce at 1148 GMT, after earlier hitting its highest since July 3 at $1,426. The metal gained 1.5% in the previous session.
U.S. gold futures jumped 0.6% to $1,421.60 an ounce.
“Powell’s testimony last night is giving gold a significant lift, with the market taking an indication that there is going to be a rate cut of 25 basis points coming soon,” said Ross Norman, chief executive at bullion dealer Sharps Pixley.
In his testimony to Congress, Powell pointed to broad global weakness clouding the U.S. economic outlook amid uncertainty on the fallout from the Trump administration’s trade conflict with China and other nations.
Echoing the dovish sentiment, the minutes from Fed’s June policy meeting showed many policymakers thought more stimulus would be needed soon, reinforcing the case for a U.S. interest rate cut in July.
Attention is now turning to U.S. CPI data at 1230 GMT.
The U.S. Treasury yield curve steepened and the dollar came off three-week highs following the congressional testimony, further supporting bullion.
“The bonds market has been indicating for a while now that the global economic backdrop is darkening. The mood in gold is pretty upbeat on the basis of that,” Norman added.
“During the bull run from $1,280, gold has had relatively few pauses and dips have been pretty shallow, indicating that underlying sentiment remains very, very positive.”
Gold rallied to a six-year peak of $1,438.63 an ounce last month, largely on the back of expectations of rate cuts by key central banks amid concerns over the global economy.
“A break above $1,438 may lead to further buying orders with $1,500 being the next level traders looking to target,” Hussein Sayed, chief market strategist at FXTM, wrote in a note.
Mirroring gains seen in gold, silver rose 0.1% to $15.26 per ounce and platinum rose 0.4% to $827.76.
Palladium, meanwhile, fell 0.5% to $1,581, after hitting its highest since March 22 at $1,605.52.
“Besides being supported by firm base metals, palladium and platinum may have profited from concerns about a possible strike in the South African platinum mining industry,” Commerzbank wrote in a note.
The world’s top platinum miners kicked off talks with South Africa’s unions on Tuesday, with negotiations on wages expected to be tough.
Reporting by Swati Verma in Bengaluru; editing by David Evans and Deepa Babington