Gold futures gained for the first time in a week as a Federal Reserve official signaled the possibility of more monetary stimulus, boosting bullion’s appeal as a hedge against possible inflation.

Minneapolis Fed President Narayana Kocherlakota sees ways to lower interest rates further, citing asset-purchase tools, he said in an interview Friday with Bloomberg Television. Gold fell in the previous two months as a resilient U.S. economy spurred speculation that officials would start tightening monetary policy.

Bullion has rebounded in August as U.S. equities tumbled amid fears that a slowdown in China’s economy may affect global growth, stoking the belief that the Fed could delay an increase in interest rates. Higher rates curb the appeal of gold because it doesn’t pay interest or offer returns, unlike competing assets.

“Kocherlakota’s comments are 100 percent what this is about," Graham Leighton, a trader at Marex Spectron in New York, said in a telephone interview. "Lower interest rates basically means a weaker dollar and strong gold, and lower interest rates are always positive for gold."

Gold futures for December delivery climbed 1 percent to settle at $1,134 an ounce at 1:56 p.m. on the Comex in New York, the first gain since Aug. 21.

Investors bought 1.8 metric tons through gold-backed funds on Thursday, data compiled by Bloomberg show. Holdings reached 1,529.4 tons, the highest since July 30.

The Fed’s Kocherlakota, who doesn’t vote on policy this year, cited low inflation as a concern in raising interest rates too quickly in his interview in Jackson Hole, Wyoming, where central bank officials are gathering for an annual conference. St. Louis Fed President James Bullard said that while world financial markets are volatile, U.S. fundamentals are good. He also spoke with Bloomberg Television from the Jackson Hole conference. Gold is still heading for the biggest weekly drop in a month as investors weigh the various comments from policy makers.

Silver futures for December delivery added 0.8 percent to $14.549 an ounce on the Comex. On the New York Mercantile Exchange, platinum futures for October delivery climbed 1.6 percent to $1,021.70 an ounce. Palladium futures for December delivery increased 3.9 percent to $590.15, capping a two-day gain of 12 percent, the most since October 2008.