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By Nakul Iyer
(Reuters) - Gold jumped on Wednesday after U.S. Federal Reserve Chair Jerome Powell reassured investors that the central bank would continue its accommodative monetary policy despite a recent spike in inflation readings.
Spot gold rose 0.8% to $1,821.40 per ounce by 10:13 a.m. EDT. U.S. gold futures gained 0.9% to $1,825.30.
Powell, in prepared remarks before a congressional hearing, said the U.S. job market "is still a ways off" from the progress the Fed wants to see before reducing its support for the economy, while current high inflation will ease "in coming months."
"It really cements the belief that despite this hotter inflation data, the Fed still remains on course to be fairly accommodative," said Edward Moya, senior market analyst at OANDA.
Powell's comments come after data showed U.S. consumer price index (CPI) and U.S. producer prices surging last month.
Investors also cheered recent comments by European Central Bank (ECB) officials that the central bank would not tighten too early.
"You're going to see more dovish signals from the ECB and the People's Bank of China (PBOC), which should provide some support to the dollar, but this is still good news for the stimulus trade and that is going to be very positive for gold," Moya said.
Further adding to bullion's support was a weakened dollar on Wednesday which restored gold's allure to holders of other currencies, and a dip in U.S. treasury yields.
Elsewhere, palladium edged 0.1% higher to $2,829.42 an ounce, while platinum rose 2.3% to $1,130.01.
HSBC said in a note, that while it expects platinum to be in a small surplus this year, prices would remain firm largely on the back of improving automobile demand.
The bank expects the precious metal to average $1,160 an ounce this year.
Silver rose 1.2% to $26.26 an ounce
(Reporting by Nakul Iyer in Bengaluru; Editing by Sandra Maler)