Gold prices hit 3-1/2-week high on Powell's dovish tone

[BENGALURU] Gold prices scaled on Monday to their highest in more than three weeks after US Federal Reserve chair Jerome Powell stopped short of providing any clear guidance on the timeline for paring economic support at the Jackson Hole economic conference.

Spot gold was up 0.2 per cent at US$1,819.71 per ounce, as of 12.46am GMT. Earlier in the session, bullion hit a peak since Aug 4 at US$1,820.50.

US gold futures were up 0.2 per cent at US$1,823.10.

On Friday, Mr Powell offered no signal on when the central bank plans to cut its asset purchases beyond saying it could be "this year" and indicated it will remain cautious in any eventual decision to raise interest rates.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Mr Powell's statement pushed the dollar index to a two-week trough, bolstering the bullion's appeal for those holding other currencies.

Data on Friday showed US consumer spending slowed in July, while fears about the Covid-19 Delta variant knocked consumer sentiment to a more than 9-1/2-year low in August.

Physical gold demand in India was subdued last week as jewellers held off purchases, hoping for a dip in prices, but top consumer China saw a slight uptick in activity.

Sales of gold bracelets, pendants, earrings and necklaces that draw on traditional Chinese symbols are flying among young consumers, helping drive a rebound in gold demand in China after a pandemic-induced slump.

Speculators raised their net long positions in Comex gold and silver in the week ended Aug 24, data from the US Commodity Futures Trading Commission showed.

Silver rose 0.3 per cent to US$24.07 per ounce, while platinum climbed 0.7 per cent to US$1,015.08. Palladium was 0.5 per cent higher at US$2,430.23.

REUTERS