Gold erases Fed-inspired gains as US dollar rebounds

NEW DELHI, Aug 01 (Reuters): Gold prices dipped as the dollar rebounded on Thursday, after bullion hit two-week highs earlier in the session on Federal Reserve Chair Jerome Powell's indications that a September interest rate cut might be considered.

Spot gold was down 0.5 per cent at $2,436.74 per ounce, as of 1141 GMT, having hit its highest since July 18 earlier in the session. Prices were just $47 shy of the record high of $2,483.60 scaled on July 17.

US gold futures firmed 0.3 per cent to $2,481.00.

Powell said on Wednesday rates could be cut as soon as September, putting the central bank near the end of a more than two-year battle against inflation.

"Powell putting a possible rate cut in September on the table is supportive for gold. But on the other hand, you now have a slightly firmer US dollar and weaker euro, and that is a negative effect," said Quantitative Commodity Research analyst Peter Fertig.

Elsewhere, spot silver fell 0.4 per cent to $28.91, platinum lost 0.6 per cent to $970.52 and palladium edged up 0.2 per cent to $927.07.