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Ammon News - Gold prices gained more than 1% on Friday as the dollar and Treasury yields retreated following comments from Federal Reserve Chair Jerome Powell that signalled an interest rate cut in September.

Spot gold rose 1.2% to $2,512.63 per ounce by 01:44 p.m. ET (1744 GMT), but was off a record high of $2,531.60 hit on Tuesday. U.S. gold futures settled 1.2% higher at $2,546.30.

Powell said "the time has come" for the U.S. central bank to cut interest rates and that inflation was nearing the Fed's 2% target, offering an explicit endorsement of an imminent policy easing.

"Gold will continue to grind higher ahead of the September Fed meeting and the updated dot plot which will indicate how many likely cuts this year."

Lower U.S. interest rates also generally increase the relative appeal of zero-yield bullion.

Traders are expecting a 59.5% chance of a 25-basis point cut in September, while 40.5% expect a deeper 50-bps reduction.

Silver rose 2.9% to $29.83 per ounce and was up nearly 2.7% for the week.

Reuters