PRECIOUS-Gold hits near two-week peak after Powell douses rate hike prospects

(Recasts, updates prices)

* Dollar slips to one-month low

* Silver hits highest since July 19

* Palladium, platinum rise 1%

July 29 (Reuters) - Gold prices rose more than 1% to a near two-week high on Thursday after U.S. Federal Reserve Chairman Jerome Powell reassured investors that a rate hike is not on the cards anytime soon, sending the dollar to multi-week lows.

Spot gold was up 1.1% at $1,826.10 per ounce by 1216 GMT, its highest since July 16.

U.S. gold futures climbed 1.5% to $1,826 per ounce.

“The gold market seems to responding to natural indicators like the dollar and U.S. Treasury rates, which are favourable to gold’s outlook and not withstanding the fact that there is no significant change in terms of Fed policy on tapering,” independent analyst Ross Norman said.

“Gold got further resistance at $1,825 per ounce, but at last silver seems to be responding to the moves in gold,” he added.

Silver jumped 2.5% to $25.55 per ounce, its highest since July 19.

Powell said the U.S. job market still had “some ground to cover” before it would be time to pull back support and the Fed was “ways away” from considering rate hikes.

Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.

Following Powell’s comments, the dollar slipped to a one-month low against its rivals, making gold less expensive for holders of other currencies.

“Rising monetary policy uncertainty, inflation and increasing risk of equity market volatility should favour demand for safe-haven assets,” ANZ Research said in a note.

Global demand for gold rose in the second quarter to its highest quarterly level in a year, as central banks and investors stepped up purchases, the World Gold Council said in a quarterly report.

Elsewhere, platinum rose 1% to $1,074.87, and palladium was up 1% at $2,651.81. (Reporting by Brijesh Patel in Bengaluru Editing by David Holmes)