As a result, the USA dollar index, a gauge of the greenback against a basket of other major currencies, fell 0.4 per cent to 97.10 shortly before the settlement of gold futures.
Powell's remarks were perceived as dovish by many market participants and fueled expectations for interest cuts, which led to the fall of the USA dollar index and sent gold futures sharply higher.
On the trade war front, USA and Chinese trade officials held "constructive" talks on trade by phone on Tuesday, White House economic adviser Larry Kudlow said on Tuesday.
The Federal Reserve last month downgraded its USA inflation projection for 2019 to 1.5% from the 1.8% projected in March.More news: Super 30’s Anand Kumar suffering from brain tumour
"...if the higher levy were to become permanent, it could reduce long-term Indian consumer demand by slightly less than 1% per year", it said in its mid-year gold outlook 2019 report.
The most active gold contract for August delivery went up 12.00 dollars, or 0.86 percent, to close at 1,412.50 dollars per ounce.
Powell provided his opening remarks to United States congress earlier today which kicked off the head central banker's 2-day testimony regarding Federal Reserve monetary policy decisions and economic outlook.
"We saw today's inflation data - the markets started to back off today because it challenges the need for additional rate cuts", said Chris Gaffney, president of world markets at TIAA Bank, calling bullion's decline a kneejerk reaction.More news: Duane 'Dog' Chapman Tearfully Shares Beth Chapman's Final Moments
The US currency against major other currencies was largely tepid for a second session.
Policymakers from the USA central bank are scheduled to meet on July 30-31, where investors will look for further cues on monetary policy easing.
"A break above $US1,438 may lead to further buying orders with $US1,500 being the next level traders looking to target", Hussein Sayed, chief market strategist at FXTM, wrote in a research note.
Other precious metals also rose, with silver up 0.7% at $15.20 per ounce, and platinum gained 2.5% to $826 per ounce. Gold holdings with SPDR Gold Trust rose 6.46 tn to 800.54 tn on Wednesday, according to data on the website of the world's largest gold exchange-traded fund.More news: Alegria advance to AFCON semis after beating Cote d'Ivoire on penalties