PRECIOUS-Gold stuck in tight range before Fed speech
* Gold faces support at $1,656 - technicals * Coming Up: U.S. personal income/spending for July; 1230 GMT (Updates prices) By Lewa Pardomuan SINGAPORE, Aug 30 (Reuters) - Gold firmed on Thursday but was trapped in a tight range ahead of a speech by Federal Reserve Chairman Ben Bernanke that could stoke expectations of a third round of quantitative easing to stimulate the U.S. economy. Gold is also vulnerable to a selloff if the Friday speech turns out to be a disappointment after the U.S. economy fared slightly better than initially thought in the second quarter and the Fed Beige Book report showed the economy continued to grow gradually in July and early August. Gold added 0.24 percent to $1,659.90 an ounce by 0641 GMT - not far from a 4-1/2 month high of $1,676.45 hit on Monday, when investors bought the metal on expectation of further monetary easing by the Fed. "Sentiment is a bit mixed. People are pretty cautious," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. "It looks like central banks are buying at the lower end. The market doesn't seem to move around too much," said Leung, who quoted premiums for gold bars unchanged from last week at 80 cents to $1. In other markets, Asian shares hit a one-month low on growth worries while major currencies trod water as investors waited to see whether Bernanke would give any hint about a stimulus in his speech to fellow central bankers. Bernanke will likely keep markets guessing about the timing of another round of bond purchases when he speaks in Jackson Hole, but he is also likely to sustain expectations for action of some kind next month. Previous rounds of asset purchases by the Fed to drive down interest rates and stimulate the economy weakened the U.S. dollar, boosted global stock markets and prompted investors to turn to gold as a hedge against inflation. Last week, gold breached the upper end of a four-month trading range to more than $1,640 after the minutes of the Fed's latest policy meeting revealed the U.S. central bank intended to adopt gold-friendly stimulus soon unless economic conditions improved dramatically. "I hope news from the Fed will be positive. But the flow of gold scraps is starting to slow down a little," said a dealer in Singapore, adding that the physical market lacked activity ahead of Bernanke's speech. U.S. gold futures were little changed at $1,662.30 an ounce. Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust GLD, and that of the silver-backed ETF, New York's iShares Silver Trust SLV, remained unchanged on Wednesday from Tuesday. Platinum rose 0.81 percent to $1,522.75 an ounce - within sight of a 3-month high hit last week as deadly violence and work stoppages in South African mines sparked supply worries. A wave of labour unrest and violence in South Africa's mining sector will have an impact on potential investments, the country's resources minister said. Precious metals prices 0641 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1659.90 3.96 +0.24 6.15 Spot Silver 30.77 0.09 +0.29 11.12 Spot Platinum 1522.75 12.25 +0.81 9.31 Spot Palladium 633.50 5.60 +0.89 -2.91 COMEX GOLD DEC2 1662.30 -0.70 -0.04 6.10 10144 COMEX SILVER SEP2 30.77 -0.07 -0.23 10.21 1672 Euro/Dollar 1.2554 Dollar/Yen 78.63 COMEX gold and silver contracts show the most active months (Editing by Robert Birsel)
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