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Gold prices edged up on Wednesday, a day after Federal Reserve Chair Jerome Powell's comments suggested the case for interest rates cuts is getting stronger, while investors braced themselves for a crucial U.S. inflation report.

Spot gold rose 0.4% to $2,372.83 per ounce by 0900 GMT. U.S. gold futures climbed 0.5% to $2,379.20.

"It sounds as if Jerome Powell’s testimony (yesterday) was giving at least an amber light towards rate cuts sooner than later" which is supporting the prices, said StoneX analyst Rhona O'Connell.

Powell maintained a cautious stance on Tuesday, acknowledging improved inflation and said that "more good data would strengthen" the case for looser monetary policy.

"With the recent run of weaker U.S. data, the case has been built around a September rate cut, but with the Fed Chair still wanting to see more good data, further inflation progress will be needed to offer more confidence for policymakers to open the door to rate cuts," said IG market strategist Yeap Jun Rong.

Traders currently see about a 73% chance of a rate cut in September, according to the CME Group's FedWatch Tool. Another cut is expected by December.

Non-yielding bullion's appeal tends to shine when interest rates fall.

Investors will assess Powell second day of testimony to the House later in the day, along with U.S. consumer price index (CPI) data which is due on Thursday.

The CPI data is expected to show that headline prices rose 0.1% month-on-month, while core prices gained 0.2%. That would put annual gains at 3.1% and 3.4%, respectively.

Meanwhile, global physically backed gold exchange traded funds saw the second consecutive month of inflows in June due to additions to holdings by Europe- and Asia-listed funds, the World Gold Council said on Tuesday.

Spot silver gained 0.6% to $30.98 per ounce, platinum rose 0.3% to $987.26 and palladium edged 0.2% lower to $978.73.