SINGAPORE: Gold prices climbed to a one-month peak in Asian trade on Thursday after US Federal Reserve Chair Jeremy Powell soothed investor fears by reassuring that he was in no rush to tighten policy, lifting the metal’s appeal as an inflation hedge.
Spot gold was up 0.3% at $1,832.23 per ounce, as of 0752 GMT. Earlier in the session, bullion hit a peak of $1,833.65, its highest since June 16.
US gold futures climbed 0.4% to $1,832.90.
Powell stuck to the view on Wednesday that the current price increases are transitory and the Fed expects to continue its bond-buying until there is “substantial further progress” on jobs, with interest rates pinned near zero likely until at least 2023.
His comments came on the heels of a robust US producer prices data.
“We are not saying that there is no strong momentum in the economy, but there is suddenly a question can such growth rate sustain,” Hitesh Jain, lead analyst at Mumbai-based Yes Securities, said.
“As long as the balance sheet remains in an expansionary mode and interest rate being so low, gold still has the potential to move towards $2,000 by the end of this year,” Jain added.
On the technical front, spot gold may test a resistance at $1,833 per ounce, a break above could lead to a gain at $1,853, according to Reuters technical analyst Wang Tao.
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