Gold edges up on weaker dollar, China data fuels growth concerns

Gold edges up on weaker dollar, China data fuels growth concerns

Powell said the Fed was ready to "act as appropriate" to sustain a decade-long USA economic expansion and pointed to economic risks including persistently weak inflation, slowing global growth and a downturn in business investment.

The remarks bolstered market expectations for imminent rate cuts from the USA central bank.

Powell's comments in a second day of testimony on Capitol Hill suggest the Fed is more comfortable keeping short-term interest rates low and suggests that Fed policymakers may cut rates at its meeting later this month.

"Clearly his messaging was far more directive in terms of what the Fed is going to do at the next meeting than just a vague promise to keep the economic expansion intact", said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

The Dow Jones Industrial Average .DJI rose 76.71 points, or 0.29%, to 26,860.2, the S&P 500 .SPX gained 13.44 points, or 0.45%, to 2,993.07 and the Nasdaq Composite .IXIC added 60.80 points, or 0.75%, to 8,202.53. The cost of household services jumped 0.8%, the most in almost 30 years, as lawn and garden service costs soared 6.1%, the most since December 1997. Benchmark 10-year Treasury notes US10YT=RR last fell 3/32 in price to yield 2.0647%, from 2.056% late on Tuesday. Australia's S&P ASX 200 gained 0.2% to 6,702.60.

"Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability", Powell told the committee, adding that he did not think the project could proceed unless those concerns were addressed.

After Powell's remarks and the Fed's minutes, interest rate futures appeared to price in greater odds of an aggressive rate cut this month. But it would reassure markets that the Fed would be open to further rate cuts if more signs of weakness in the global economy emerge.

"It's a precautionary action by the Fed in an environment showing risks to economic growth, but it's not (because of) immediate economic danger", said John Stoltzfus, chief investment strategist at Oppenheimer Asset Management in NY, of the likelihood of interest rate cuts.

Retaliatory tariffs remain another worry for markets.

The euro was flat at $1.1254, having pulled back from a high of $1.1285 scaled on Thursday prior to the USA inflation data.

While China-U.S. trade tensions have calmed with a resumption of talks by phone between top envoys, friction with France looms after President Donald Trump's administration launched an investigation into French plans for a special tax targeting big tech companies. Shares also rose in Taiwan and Southeast Asia.

Brent crude oil, the global standard, added 9 cents to $67.10 per barrel.

Ford Motor Co shares gained 2.65% after the automaker and Volkswagen AG said they would join forces to develop autonomous and electric cars.

CURRENCIES: The dollar fell to 107.87 Japanese yen from 108.45 yen on Wednesday. The euro strengthened to $1.1271 from $1.1250.

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