PRECIOUS-Gold near 5-month high on stimulus hopes

* Speculators increase bullish bets in U.S. gold
* Spot gold faces resistance at $1,693/oz - technicals
* Coming Up: Euro zone Markit manufacturing PMI, Aug; 0758
GMT

(Updates prices)
By Rujun Shen
SINGAPORE, Sept 3 (Reuters) - Gold hovered near a five-month
peak on Monday, supported by hopes for more stimulus measures
after U.S. Federal Reserve Chairman Ben Bernanke gave a grave
assessment of the economy last week.
Bernanke left the door wide open to a further easing of
monetary policy but gave few hints on any imminent action. Gold
benefits from loose monetary policy, as rampant cash printing
boosts inflation outlook and drives investors to gold, seen as a
good hedge against rising prices.
Gold bugs have in recent weeks pinned hopes on another round
of quantitative easing from the Fed, also known as QE3, and
pushed gold up nearly 5 percent over the past two weeks.
"Central banks are still hurtling towards more
cash-printing, as they are under pressure to be doing something
actively, which is good for gold," said a Hong Kong-based
trader.
Speculators raised their net long positions in U.S. gold
futures and options to the highest level in more than five
months in the week ended Aug. 28, according to the U.S.
Commodity Futures Trading Commission.
Spot gold edged down 0.3 percent to $1,686.34 an
ounce by 0648 GMT, holding near a five-month high of $1,692.71
hit on Friday.
U.S. gold inched up 0.1 percent to $1,689.50.

Investors will watch a series of key events in the coming
weeks that could dictate the sentiment in the market, including
a European Central Bank policy meeting and U.S. non-farm
payrolls this week, the gathering of the Fed's policy-making
wing and the German court's ruling on the euro zone's rescue
fund next week.
"Gold, being extremely sensitive to wordings such as 'QE'
and 'easing', is likely to march higher in the short term after
Bernanke acknowledged the weakness in the U.S. economy and
effectiveness of past easing moves," said Li Ning, an analyst at
Shanghai CIFCO Futures.
China's official factory purchasing managers' index
fell to a lower-than-expected 49.2 in August from
50.1 in July, official data showed on Saturday, a result that is
likely to strengthen the case for further policy steps to
bolster growth.
Talks to end a deadly strike at the South African mining
operations of world No. 3 platinum producer Lonmin
resume on Monday after weekend funerals for over 30
workers killed by police.
Spot platinum gained 0.4 percent to $1,535.49 an
ounce, after losing 0.8 percent last week following two weeks of
strong gains.

Precious metals prices 0648 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1686.34 -4.30 -0.25 7.84
Spot Silver 31.81 0.11 +0.35 14.88
Spot Platinum 1535.49 6.29 +0.41 10.23
Spot Palladium 628.00 12.70 +2.06 -3.75
COMEX GOLD DEC2 1689.50 1.90 +0.11 7.83 15203
COMEX SILVER DEC2 31.86 0.42 +1.33 14.13 5295
Euro/Dollar 1.2565
Dollar/Yen 78.26
COMEX gold and silver contracts show the most active months

(Editing by Himani Sarkar)