July 11 (Reuters) - Gold prices rose to their highest in
over a week on Thursday as the dollar pulled back from
multi-week highs after comments from Federal Reserve Chairman
Jerome Powell bolstered expectations for an interest rate cut
later this month.
FUNDAMENTALS
* Spot gold XAU= was up 0.4% at $1,423.80 per ounce as of
0112 GMT, after earlier hitting its highest since July 3 at
$1,426.
* U.S. gold futures GCv1 jumped 1.1% to $1,427.40 an
ounce.
* In an appearance before his congressional overseers on
Wednesday, Powell confirmed that the U.S. economy is still under
threat from disappointing factory activity, tame inflation and a
simmering trade war.
* Powell said the central bank stands ready to "act as
appropriate".
* Adding to a generally dovish tone in his testimony, the
minutes from the Fed's previous policy meeting showed many
policymakers thought more stimulus would be needed soon,
reviving speculation of an aggressive rate cut. * The dollar index .DXY pulled back from a three-week peak
and the U.S. Treasury yield curve steepened in the wake of
Powell's comments. USD/ US/
* Money market futures price 0#FF: have jumped to price in
about a 30% chance that the Fed will cut rates by 50 basis
points at its next policy review on July 30-31 - a scenario that
had been priced out after Friday's strong U.S. jobs data.
* Lower U.S. interest rates put pressure on the dollar and
bond yields, increasing the appeal of non-yielding bullion.
* Asian stocks rose on Thursday following Powell's comments.
MKTS/GLOB
* SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, said its holdings rose 0.81 percent to
800.54 tonnes on Wednesday from 794.08 tonnes on Tuesday.
GOL/ETF
DATA AHEAD (GMT)
* 1230 US CPI MM, SA June
* 1230 US Initial Jobless Claims weekly
* 1400 US Fed's Chairman Jerome Powell
testifies on the Semiannual
Monetary Report to Congress before
the Senate Banking Committee