Gold prices surged following the statement of the chairman of the Federal Reserve (Fed) who was less hawkish about the increase in interest rates causing US dollar trading and US bond yields to shrink.
In the Asian session, the yellow metal traded higher at $1,738 an ounce after rising 1% to a two-week high in the previous session. Gold futures were positive at $1,739 per ounce.
Chairman Jerome Powell said that a slower rate of increase may be necessary to give time to assess the impact of the tightening measures on the economy and inflation.
But at the same time, he also supported the idea of the central bank to deliver a big rate hike in September, depending on economic data and they would also no longer provide guidance on forward policy setting.
This caused the US dollar to fall to a three-week low and US 10-year bond yields remained gloomy.
In addition, Powell also eased investors' fears of a recession ahead of the publication of US economic growth data for the second quarter to be published today.
Powell said he did not believe the US was in a recession because data showed jobs remained strong with the unemployment rate at record lows.
