* U.S. 10-year Treasury yields hit fresh 16-year peak
* Gold hit its highest since Aug. 1 on Wednesday
* Spot gold to retest resistance of $1,964 - technicals
Oct 19 (Reuters) -
Gold edged higher to near 2-1/2-month high on Thursday as fears of an escalation in the Israel-Hamas conflict kept demand for safe-haven assets intact, with focus also on U.S. Federal Reserve Chair Jerome Powell's speech later in the day.
Spot gold rose 0.1% to $1,950.29 per ounce by 1015 GMT after hitting its highest since Aug. 1 in the previous session. U.S. gold futures eased 0.3% to $1,962.10.
A break above the $1,960-$1,950 in bullion prices "will send out a very strong positive signal, (with) markets scared about what's happening in Gaza and Israel," said Carlo Alberto De Casa, market analyst at Kinesis Money.
Additionally, chances of a peak in U.S. interest rates also make investors feel that gold "can be a very strong safe haven," De Casa said.
According to Reuters technical analyst Wang Tao, gold could retest resistance of $1,964 per ounce, a break above which could lead to a gain into the $1,972-$1,985 range.
Safe-haven demand since the start of the Middle East
conflict
has driven a nearly $120 rise in gold prices per ounce.
"Gold's resilience in the face of rising yields and a rebounding U.S. dollar, especially over the past several days, have really been a testament to the geopolitical backdrop," said Ilya Spivak, head of global macro at Tastylive.
Market focus will also be on Powell's speech to the Economic Club of New York for more cues on the interest rate path following the recent dovish comments from several Fed officials.
Higher rates raise the opportunity cost of non-yielding gold, which is priced in dollars.
Spot silver was steady at $22.87, platinum slipped 0.6% to $880.04 and palladium fell 2.1% to $1,105.17.
(Reporting by Harshit Verma in Bengaluru; Editing by Shweta Agarwal)
