Gold rises with US rate cut optimism

LONDON, July 16 (Reuters): Gold prices rose on Tuesday as comments from Federal Reserve Chair Jerome Powell bolstered the case for a September rate cut, while investors awaited more U.S. economic data for further monetary policy cues.

Spot gold gained 0.8 per cent to $2,440.29 per ounce by 1207 GMT. The bullion hovers only slightly below the record high of $2,449.89 hit on May 20.

Powell said on Monday the three US inflation readings over the second quarter of this year "add somewhat to confidence" that the pace of price increases is returning to the Fed's target in a sustainable fashion.

Gold hit multiple new highs in April and May and then retreated in June when U.S. interest rate cut forecasts were pushed out, and physical demand started to soften in response to the high prices. In July, greater optimism for a September rate cut has driven the non-yielding bullion higher again.

Among other metals, spot silver fell 0.7 per cent to $30.78 per ounce, platinum lost 0.2 per cent to $993.10 and palladium was down 0.7 per cent at $943.19.