(Recasts with Fed speech, updates prices, adds analyst comments)
* Palladium hits fresh record high
* GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl
By K. Sathya Narayanan and Sethuraman N R
BENGALURU, Nov 28 (Reuters) - Gold prices recovered from two-week lows, rising as much as 1 percent as the dollar fell after Federal Reserve Chairman Jerome Powell offered little clues on the pace of future interest rate hikes in a cautious speech.
Meanwhile, palladium prices hit a fresh record high at $1,186.30 per ounce.
While there was “a great deal to like” about U.S. prospects, the bank’s gradual interest-rate hikes are meant to balance risks as it tries to keep the economy on track, Powell said.
“Powell’s comments suggest that 2019 may be more of a wait-and-see approach and the assumption of any hikes may be premature,” said Tai Wong, head of metals trading at BMO.
Spot gold was up 0.6 percent at $1,221.68 per ounce at 12:49 p.m. EST (1749 GMT) after rising as much as 1 percent to $1,226.24. Prices fell to its lowest level since Nov. 15 at $1,210.65 earlier in the session.
U.S. gold futures were up 0.7 percent at $1,222.
Investors will also keep a close watch for the minutes from the central bank’s Nov. 7-8 meeting, scheduled to be released on Thursday, for indications on the rate hike trajectory in 2019.
The Fed has raised rates three times this year.
The dollar index, which measures the greenback against a basket of currencies, was down 0.3 percent after the Fed speech.
Meanwhile, U.S. President Donald Trump is likely to meet his Chinese counterpart on the sidelines of the G20 meeting later this week to discuss the trade dispute between the major economies.
Bullion has largely lost out to the dollar as a safe haven asset this year as the U.S.-China trade war unfolded against a backdrop of rising U.S. interest rates.
“Gold should stay fairly range-bound in the short term. I struggle to see it breaking below $1,200 and likewise on the upside, until the end of this year, I struggle to see it breaking above $1,250 as well,” ING analyst Warren Patterson said.
Palladium was up nearly 3 percent at $1,182.99 per ounce, after hitting the record high.
“The market remains very tight. ... Potential growth for supply is very limited and demand remains robust even though we’ve seen a decline in auto sales in China and a slowdown in car sales in the U.S.,” said Suki Cooper, precious metals analyst at Standard Chartered Bank.
Silver rose 1.1 percent to $14.29 per ounce, while platinum fell 1.1 percent to $821.30, having earlier touched its lowest in more than a month, at $814.50. (Reporting by K. Sathya Narayanan, Arpan Varghese and Swati Verma in Bengaluru; Editing by Will Dunham and Marguerita Choy)