Gold prices rose to a one-week high on Thursday, supported by a slightly weaker dollar, while traders digested fairly balanced comments from US Federal Reserve Chair Jerome Powell after a widely expected interest rate hike.

Spot gold was up 0.3% at $1,977.13 per ounce, as of 0352 GMT, after earlier hitting its highest since July 20, while US gold futures rose 0.4% to $1,978.70.

Gold prices could be volatile because of the Fed mentioning another rate hike for the year, with bullion probably seeing a slight movement up, said Brian Lan of Singapore dealer GoldSilver Central, adding that it all depends on upcoming data.

The Fed raised interest rates by a quarter-of-a-percentage point on Wednesday, highlighting that another 25 basis-point hike could be in September based on a wide range of data.

However, Powell flagged they were no longer forecasting a US recession.

Gold is highly sensitive to rising interest rates as they increase the opportunity cost of holding non-yielding bullion.

The dollar index was lower, supporting bullion as a weaker dollar makes gold cheaper for holders of other currencies.

Later in the day, the United States is expected to report gross domestic product increased at a 1.8% annualised rate in the second quarter, down from 2% in Q1.

Gold prices continue to decline

Investors will also focus on the European Central Bank’s policy decision later in the day, with the bank expected to raise rates for a ninth time and thereafter taking a “data-dependent” approach instead.

On Friday, traders will see if the Japanese central bank takes steps towards phasing out its yield control programme.

In China, industrial profits declined 16.8% year-to-date as waning demand took a toll on corporate profit margins, bolstering the case for more supportive policy to help the economy.

Spot silver rose 0.5% to $25.04 per ounce, platinum gained 0.7% to $967.97 and palladium was up 0.4% to $1,264.64.