Powell offered few further clues on how much longer the USA central bank would raise interest rates in the face of a slowdown overseas and market volatility at home.
Analysts think a rate hike next month is likely, but economists admit three rate increases for next year are beginning to look less certain, especially if stock market volatility increases, and consumer and business sentiment worsens in early 2019.
The yellow metal climbed and the USA dollar fell following Fed Chair Jerome Powell's comments on interest rate hikes in 2019. His predecessors took care not to directly attack the central bank's rate policy out of concern that such criticism could backfire.
The Fed has settled into a quarterly rate-hike cycle and is still expected to raise rates again next month, in what would be the fourth hike this year. For the stock market, he emphasised that current valuations are broadly in line with the long term levels and do not see "dangerous excesses" in equities.
The months following Powell's original comments were hard for the stock market as the interest rate, concerns over the ongoing trade war with China and turbulence in the tech sector left all three major indexes in correction territory before bouncing back this week.
The rate hike likely coming on December 19 would raise the benchmark lending rate, which influences borrowing costs throughout the wider economy, to 2.5 per cent.
Powell's speech came a day after US President Donald Trump's latest attack on the US central bank.
In what was seen as a shift in tone from remarks last month, Powell said Wednesday that the Fed's series of rate increases had brought policy to "just below" the range of estimates of neutral, where it neither spurs nor restricts the economy. That comment had unsettled investors who feared that it meant the Fed would need a number of further hikes to get to neutral.
Higher interest rates tend to slow economic growth over time as well as pressure stock prices according to Powell. George HW Bush said in 1998 that he blamed Alan Greenspan, the former Fed chairman, for his defeat in 1992 at the hands of Mr Clinton because he had not cut interest rates fast enough in 1990 and 1991.
Powell said that the outlook for the USA economy remains solid and that interest rates are almost within a "neutral" range.
"Many participants indicated that it might be appropriate at some upcoming meetings to begin to transition to statement language that placed greater emphasis on the evaluation of incoming data in assessing the economic and policy outlook", said the minutes.
"Even if central bank policies are fully anticipated by the public, some adjustments could occur abruptly, contributing to volatility in domestic and global financial markets and strains in institutions", according to the Fed report. The law creating the Fed says its officials and those of other independent agencies can be "removed for cause" by a president. And I'm not blaming anybody, but I'm just telling you I think that the Fed is way off-base with what they're doing. Futures showed the amount of tightening priced in for 2019 slipped to 25 basis points - equivalent to just a single rate hike.