Gold hit a new record high near $3,800 as rising expectations for another US interest rate cut and safe-haven flows supported the precious metal.
At 9:10 a.m., gold was at $3,767.85, up 0.10% since it opened early Wednesday in Asian trading.
Fed Chairman Jerome Powell said on Tuesday that the central bank faces a challenging environment with the risk of inflation remaining hotter than expected, while weak job growth raised concerns about the labor report.
He added that he was comfortable with current rates, although he indicated that further cuts could be possible if the FOMC sees the need to be more accommodative.
The market is now expecting two more Fed rate cuts of 25 basis points, in October and December, with a chance of about 80%. Lower interest rates could reduce the opportunity cost of holding gold.
In addition, rising geopolitical tensions in Russia are boosting the value of traditional safe-haven assets.
NATO warned Russia that it would use all military means if necessary to defend itself, while condemning Moscow for violating Estonian airspace.
Attention will turn to the release of the US Personal Consumption Expenditures (PCE) Price Index for August data, the Fed's preferred inflation measure.
If the report shows a warmer-than-expected inflation outcome, this could lift the US Dollar (USD) and weigh on USD-denominated commodity prices in the near term.
