March 7 (Reuters) - Gold prices rallied on Thursday closer to their all-time-high record on strengthened bets for lower U.S. interest rates this year following Federal Reserve Chair Jerome Powell's remarks, while geopolitical risks also worked in the bullion's favour.
Spot gold gained 0.3% to $2,154.79 per ounce, as of 09:58 a.m. ET (1458 GMT) after hitting a record high of $2,164.09 earlier in the session. U.S. gold futures rose 0.2% to $2,162.00.
Rate cut expectations are the driver for gold prices, everyone is expecting that rate cuts will come, said WGC market strategist Joseph Cavatoni, adding that central banks' gold purchases continue to be very strong.
Zero-yield gold tends to thrive when interest rates are low.
Fed Chair Jerome Powell said on Wednesday that continued progress on inflation "is not assured", though the U.S. central bank still expects to reduce its benchmark interest rate this year.
Powell's remarks, coupled with softer labour market conditions, pushed U.S. Treasury yields and the dollar lower, boosting demand for gold.
Geopolitical risks are fuelling gains in the bullion, said James Steel, precious metals analyst at HSBC.
"We only have a narrow group of assets that investors can really call safe haven- and gold is number one amongst them."
Israel will push on with its offensive against Hamas despite growing international pressure, Prime Minister Benjamin Netanyahu said.
Bullion has climbed over $300 since the start of the Israel-Hamas war.
Markets now await Friday's U.S. non-farm payrolls report for February to further gauge the Fed's policy trajectory.
In the physical market, a surge in prices could dampen consumption during the wedding season in India, but top buyer China will see robust safe-haven demand this year, analysts and traders said.
Spot silver added 0.8% to $24.34, while platinum climbed 1.5% to $921.15 per ounce.
Palladium slipped 0.1% to $1,041.00, after surging as much as 12% in the last session.
Reporting by Anjana Anil and Anushree Mukherjee in Bengaluru; Editing by Shinjini Ganguli
