Gold prices jumped three dirhams per gram in the UAE on Thursday morning after US Federal Reserve Chair Jerome Powell hinted at smaller interest rate hikes in the coming months.

The 24K gold price jumped to Dh215.5 per gram at the opening of the markets on Thursday as compared to last night’s close of Dh212.5.

The other variants also opened sharply higher in the early trade.

According to Dubai Gold and Jewellery Group data, 22K, 21K and 18K were trading at Dh202.5, Dh193.25 and Dh165.5 per gram, respectively.

Spot gold was up 0.35 per cent to $1,779.6 per ounce as of 9.35am UAE time.

Powell said on Wednesday it was time to slow the pace of coming interest rate hikes while also signalling a protracted economic adjustment to a world where borrowing costs will remain high, inflation comes down slowly, and the US remains chronically short of workers.

Market participants now expect a 91 per cent chance of a 50 basis points rate hike in the US central bank's upcoming December meeting.

Lower interest rates tend to boost bullion's appeal as it reduces the opportunity cost of holding the non-yielding asset.