There might be fewer interest rate hikes in 2019.
The Fed held rates steady at its November meeting, and made no mention in its statement after that session about the sharp sell-off in equity markets in the weeks before it.
Powell's comments briefly pushed the US 10-year bond yield below the psychologically key 3 percent level earlier on Thursday, its lowest level since mid-September. Beyond the immediate focus of this weekend's Group of 20 summit - which may roil markets - there are other drivers that favour further gains in bullion including a steady build-up in exchange-traded fund holdings as well as votes of confidence from top banks.
Powell remains upbeat on the economy, forecasting continued solid growth, low unemployment and inflation near the Fed's 2 percent target.
"The health of the economy gradually but steadily improved, and about three years ago the [Fed] judged that the interests of households and businesses, of savers and borrowers, were no longer best served by such extraordinarily low rates", he said.
US crude oil futures settled at $51.45 per barrel, up $1.16 or 2.31 percent.
The Fed is expected to increase rates again in December and has estimated three more increases might be necessary next year. Minutes the next day, which covered the Fed's last meeting, signaled policy makers will adopt a more flexible approach in 2019.
Earlier in November, Powell was optimistic about the state of the economy, citing strong annual economic growth exceeding 3 percent and unemployment at a near five-decade low of 3.7 percent. The current system relies on the Fed paying interest on some reserves to set the federal funds rate.
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"I do think over time folks will have to get used to the idea that we can and will move at any meeting", said Powell in a question-and-answer session in Dallas.
Higher rates are seen to weigh on bullion, which doesn't bear interest. Speaking on Wednesday, Powell said the effects of Fed policy decisions "may take a year or more to be fully realized". That could fall to two when officials update those forecasts at their Dec 18-19 meeting, Wrightson ICAP chief economist Lou Crandall said.
In his highly anticipated address, which came on the heels of a tumultuous month for the markets, Powell noted that the central bank is trying to carefully strike a balance between raising interest rates too quickly, and too slowly.
During the previous tightening cycle from mid-2004 to 2006, when borrowing costs rose to 5.25%, gold surged more than 50%.
However, being just below neutral doesn't necessarily mean that the Fed is nearing its limit in terms of hiking rates as the range for neutrality can vary.
"Gold may struggle to rally", Frappell said.
Just on Tuesday, Fed Vice Chair Richard Clarida, in a speech to numerous same economists and investors in NY, used precisely the same language to describe the policy rate as "just below" the range for neutral. US-China trade issues could also dominate the Fed's narrative, he added. The minutes show support for a fourth hike this year if the labor market and inflation meet or exceed expectations.
Minutes of the USA central bank's November 7-8 meeting showed "almost all participants" agreed that another rate hike would likely be necessary "fairly soon".