Gold futures climbed sharply on Wednesday, poised to log their highest finish in a week, as the U.S. dollar weakened on the back of remarks from U.S. Federal Reserve Chairman Jerome Powell that were perceived as dovish.

In prepared remarks for Congress, Powell said Wednesday that the U.S economy is suffering from a bout of uncertainty caused by trade policy uncertainties and slower global economic growth and he pledged again that the central bank would act as needed to support demand.

The Fed would closely monitor developments “and would act as appropriate to sustain the expansion,” Powell said, repeating a pledge made in June.

“Overall, this sounds like Powell is hinting toward a rate cut while also trying to avoid panicking investors wondering about the outlook for corporate earnings and questioning valuations,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “ It also sounds like the Fed may be looking at a “one-and-done” cut rather than the start of a prolonged easing program.”

Against that backdrop, gold for August delivery on Comex

GCQ19, +0.64%

 rose $8.60, or 0.6%, at $1,409.10 an ounce, on track to settle at its highest since July 3. September silver

SIU19, +0.42%

 added 8.8 cents, or 0.6%, to $15.235 an ounce. Precious metals tend to draw buying in a low interest-rate climate.

The ICE U.S. Dollar Index

DXY, -0.29%

a measure of the U.S. currency against a basket of six major rivals, moved lower after Powell’s remarks, trading down 0.3% at 97.226. A weaker dollar can be a supportive for commodities priced in the greenback, making them less expensive to users of other currencies.

Jim Wyckoff, senior analyst at Kitco.com, said Powell’s comments “strongly suggest the Fed will cut U.S. interest rates sooner rather than later, and possibly later this month. That’s a bullish scenario of the precious metals markets.”

Powell is taking questions from members of the house Financial Services Committee and will hold another day of testimony before Congress on Thursday. Minutes from the Federal Open Market Committee meeting in June will be released later Wednesday, after gold futures have settled.

Palladium was a standout among metals trading Wednesday, as the September palladium contract

PAU19, +2.99%

 added $42.70, or 2.8%, at $1,582.60 an ounce, looking to tally another record high on Comex.

Top platinum miners began talks with South Africa’s employee unions on Tuesday, according to a recent report from Reuters, with wages likely to be a hot topic, raising the concerns over a possible strike.

Among other metals, October platinum

PLV19, +1.47%

 rose $10.80, or 1.3%, to $825.90 an ounce. September copper

HGU19, +1.96%

 rose 5 cents, or 1.9%, to $2.675 a pound.

The SPDR Gold Shares exchange-traded fund

GLD, +0.76%

 added 0.7%.

Read: Gold-backed ETF assets in June logged their biggest monthly rise in seven years

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2019-07-10