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PRECIOUS-Gold slips, tracking higher dollar ahead of Bernanke testimony
July 17, 2013 / 3:52 AM / 4 years ago

PRECIOUS-Gold slips, tracking higher dollar ahead of Bernanke testimony

* Gold falls after gain of 0.8 percent on Tuesday
    * Physical demand eases
    * SPDR outflows resume after three days

 (Adds quotes from dealer, updates prices)
    By A. Ananthalakshmi
    SINGAPORE, July 17 (Reuters) - Gold eased on Wednesday but
stayed near a three-week high, as the dollar gained ahead of
keenly awaited congressional testimony by U.S. Federal Reserve
Chairman Ben Bernanke later in the day.
    Bullion prices have traded in a tight range over the last
few sessions as investors held back on big bets ahead of the
testimony, which they hope will provide a clear outlook
regarding the Fed's $85-billion monthly bond purchases.
    Slowing physical demand also contributed to the market's
cautious undertone.
    "The trend is unclear, so gold is just following the
dollar," said Peter Fung, head of dealing at Hong Kong's Wing
Fung Precious Metals.
    "We are not sure what to expect from Bernanke as he has made
contrasting comments over the last few weeks. Gold is waiting
for guidance from him," said Fung.
    The Fed's bond purchases have boosted market liquidity,
benefiting gold and other commodities. They have also kept the
dollar subdued, driving purchases of commodities by holders of
other currencies.  
    Spot gold fell 0.3 percent to $1,287.76 an ounce by
0646 GMT. U.S. gold lost about $4 to $1,286.80.
    The dollar inched up 0.2 percent on Wednesday, but
was not far from a three-week low. 
    Gold has swayed between sharp gains and losses in the last
few weeks, following mixed comments from the Fed about the
likely timing of a scale-back in monetary stimulus.
    Bernanke said last month the U.S. economy was recovering
strongly enough for the Fed to begin pulling back bond purchases
over the next few months. But following the market panic that
ensued, he said last week that a "highly accommodative policy is
needed for the foreseeable future".
    Gold hit a three-week high of $1,298.36 on Thursday but has
struggled to cross the $1,300 level. Physical demand has also
taken a pause as prices have bounced off recent lows. 
    Buying interest from China has been subdued over the last
few days, as indicated by Shanghai premiums, which have eased to
around $25 per ounce from $36 from last week. 
    "Demand has quietened down. Though we are still seeing
strong demand for gold kilo bars," said Brian Lan, managing
director of Singapore-based dealer GoldSilver Central Pte Ltd.
    Outflows from SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, resumed after a three-day
pause. Holdings of the fund fell to 937.57 tonnes on Tuesday,
their lowest in four years. 
  Precious metals prices 0646 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1287.76   -4.23   -0.33    -23.10
  Spot Silver        19.83   -0.15   -0.75    -34.51
  Spot Platinum    1419.24   -4.26   -0.30     -7.54
  Spot Palladium    728.47   -5.03   -0.69      5.27
  COMEX GOLD AUG3  1286.80   -3.60   -0.28    -23.21        17277
  COMEX SILVER SEP3  19.83   -0.11   -0.55    -34.58         4442
  Euro/Dollar       1.3133
  Dollar/Yen         99.37
  COMEX gold and silver contracts show the most active months
 (Editing by Clarence Fernandez)

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