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Gold prices dipped as the dollar rebounded on Thursday, after bullion hit two-week highs earlier in the session on Federal Reserve Chair Jerome Powell's indications that a September interest rate cut might be considered.

Spot gold was down 0.7% at $2,432.29 per ounce, as of 0956 GMT, having hit its highest since July 18 earlier in the session. Prices were just $51 shy of the record high of $2,483.60 scaled on July 17.

U.S. gold futures firmed 0.1% to $2,476.10.

Fed Chair Jerome Powell said on Wednesday rates could be cut as soon as September, putting the central bank near the end of a more than two-year battle against inflation.

"Powell putting a possible rate cut in September on the table is supportive for gold. But on the other hand, you now have a slightly firmer U.S. dollar and weaker euro, and that is a negative effect," said Quantitative Commodity Research analyst Peter Fertig. [USD/]

Market focus now shifts to Friday's U.S. payrolls report.

If July job growth exceeds expectations, doubts may arise about a September Fed rate cut, Fertig added.

"A reminder to not be short gold near range lows, and cognizant that geopolitics is increasingly more supportive in the medium-long-term," Nicky Shiels, head of metals strategy at MKS PAMP SA, wrote in a note.

Bullion, traditionally known for its stability as a favoured hedge against geopolitical and economic risks, thrives in a low-interest rate environment.

"Central bank gold demand should stay high in 2024/2025 despite the recent absence of 'reported' PBOC gold purchases in May and June," analysts at Citi wrote in a note.

"But that seems unlikely to reverse a broader EM CB (emerging central bank) trend of increasing gold holdings due to de-dollarization, reserve diversification, and alt-fiat demand," they added.

Elsewhere, spot silver fell 0.7% to $28.83, platinum lost 1% to $966.40 and palladium eased 0.4% at $921.97.