NEW YORK: Gold popped higher, hitting an over two-week high, on Wednesday as the dollar and Treasury yields retreated, while traders positioned for US Federal Reserve Chair Jerome Powell’s remarks on whether more interest rate hikes are needed.

Spot gold was up 0.6% at $1942.80 per ounce at 12:07 p.m. EDT (1607 GMT). US gold futures rose 0.6% to $1,964.40. “The key is going to be what are Powell’s comments after the actual (rate) announcement,” with the markets expecting rates to be kept steady, said Bob Haberkorn, senior market strategist at RJO Futures. “There are concerns about energy getting too high,” and whether the Fed would have to stay aggressive, Haberkorn added.

Surging oil prices add to inflationary pressures, in turn raising expectations that the Fed will keep rates higher for longer. While gold is considered a hedge against rising inflation, higher rates boost competing Treasury yields, dulling bullion’s appeal. The Fed’s rate-setting committee will release its decision and updated projections at 1800 GMT, with Powell scheduled to hold a press conference at 1830 GMT.