Gold prices rose to a one-week high on Thursday, extending gains from the previous session after US Federal Reserve Chairman Jerome Powell's dovish remarks bolstered expectations of an interest rate cut this month. Spot gold rose 0.3% to $1,422.67 per ounce at 0948 GMT, after earlier hitting its highest since July 3 at $1,426. The metal gained 1.5% in the previous session. US gold futures jumped 0.9% to $1,424.70 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 US economic outlook amid uncertainty on the fallout from the Trump administration's trade conflict with China and other nations.
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. Gold is often seen as an alternative investment during times of political and financial uncertainty. Indicative of investor sentiment, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.8% on Wednesday.