SINGAPORE: Gold prices gained in Asian trade on Wednesday, hovering close to a one-week high hit in the previous session, as a weaker dollar and remarks by Federal Reserve Chairman Jerome Powell that the US economy still needed support boosted bullion’s appeal. Spot gold rose 0.2% to $1,808.01 per ounce by 0714 GMT, having hit its highest since Feb. 16 at $1,815.63 on Tuesday. US gold futures were steady at $1,806.20.

“Powell was just credible enough on his dovishness... so gold had more room to breathe,” said Stephen Innes, chief global market strategist at financial services firm Axi, adding that a weaker dollar was also supporting bullion prices. In the near term, gold will continue to react to the moves in bond yields, Innes said.

Easy monetary policy tends to weigh on government bond yields, increasing the appeal of non-yielding gold. Powell’s remarks indicated that “the stimulus trade is unlikely to go away anytime in the next six months,” said Michael Langford, director at corporate advisory AirGuide.

A depreciation in the US dollar and potential impact of inflation as a result of stimulus measures will be key drivers for gold, he added. Investor focus remains on a $1.9 trillion coronavirus relief aid that is expected to pass later this week. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.4% to 1,110.44 tonnes on Tuesday from 1,115.4 tonnes on Monday.