Gold gained on Wednesday as some investors used a retreat in the last session to buy bullion as a hedge against overall market volatility amid lingering concerns over the impact of the Omicron coronavirus variant.
Spot gold rose 0.7% to $1,785.38 per ounce by 1224 GMT, after falling as much as 0.9% in Tuesday's session on Powell's remarks that the central bank will discuss whether to end bond purchases earlier than expected, in its December meeting.
U.S. gold futures advanced 0.7% to $1,788.10.
But gold's bounce came alongside a sharp rebound in stock markets as investors used the dip in prices to bet the latest COVID-19 variant would not derail the economic recovery, suggesting safe-haven inflows into bullion might not be as strong as anticipated.
Virus-related concerns are offering gold "limited support," said Ricardo Evangelista, senior analyst at ActivTrades, with bullion also benefiting from "the usual flight to safe havens that normally follows the levels of volatility registered over the last few session."
While gold may benefit as questions remain over the new variant, the main narrative remains focused on what the Fed will do and bullion could face pressure if Friday's U.S. employment data confirms the strengthening of the labour market, Evangelista added.
Reduced stimulus and interest rate hikes push government bond yields up, raising non-interest bearing gold's opportunity cost.
The United States imposed tougher COVID-19 testing rules for air travellers, and more countries tightened borders amid uncertainty over Omicron.
Gold remains trapped in a $1,770-$1,825 range, StoneX analyst Rhona O'Connell said.
"The market is largely a jobbing exercise at the moment, with polarised views between the bulls and the bears," O'Connell added.
Spot silver edged 0.1% higher to $22.83 per ounce.
Platinum gained 2.1% to $953.98 and palladium climbed 1.5% to $1,764.66.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber and David Evans) ((Arundhati.Sarkar@thomsonreuters.com; twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776))