PRECIOUS-Gold holds near one-week high, Fed eyed

Wed Jul 10, 2013 4:11am EDT

* Gold rises for third session reversing earlier losses
    * Dollar falls from six-week high 
    * China's June trade data disappoints, outlook grim
    * Markets eye FOMC minutes, Bernanke speech

 (Adds comments, updates prices)
    By A. Ananthalakshmi
    SINGAPORE, July 10 (Reuters) - Gold rebounded from light
falls to trade near a one-week high on Wednesday, as the dollar
fell and investors awaited Federal Reserve Chairman Ben
Bernanke's speech later today for clues on whether it will taper
stimulus measures soon.
    Earlier in the session, gold had slipped after weak Chinese
trade data raised fears of an economic slowdown in the world's
second-biggest consumer of the metal.
    Bullion has fallen nearly 10 percent since Bernanke said
last month the U.S. economy was recovering strongly enough to
slow the pace of the Fed's $85 billion monthly bond purchases.
    "Some are hoping to see the Fed making an effort to calm the
markets," said a Hong Kong-based trader. The trader said prices
may see some support if the Fed decides to taper in December or
later, instead of current expectations of a September wind down.
    Spot gold gained 0.35 percent to $1,253.16 an ounce
by 0737 GMT on Wednesday, after falling as low as $1,243.54
earlier. Comex gold rose $6 to $1,252.
    Gold for immediate delivery hit a one-week high of $1,260.01
on Tuesday, helped by higher-than-expected Chinese inflation
data and physical demand.
    The Fed releases minutes from its June policy meeting at
1800 GMT and Bernanke is due to speak at a conference later on. 
    Several Fed officials have tried to reassure global markets
after Bernanke's comments in June caused panic. Gold fell to a
near three-year low of $1,180.71.
    The Fed's bond purchases have raised worries about
inflation, boosting demand for gold, which is seen as a hedge
against rising prices. The stimulus measures have also boosted
liquidity overall and driven funds into commodities. 
    
    CHINA DATA 
    Weak Chinese trade data stoked fears of a slowdown in demand
for commodities in the world's second-biggest economy.
    China has been a big support for gold prices, which have
lost a quarter of their value this year due to a possible scale
back of U.S. monetary stimulus, outflows from exchange-traded
funds (ETFs) and import restrictions in top buyer India.
    Wednesday's data showed that China's exports fell 3.1
percent in June, the first decline since January 2012, while
imports dropped 0.7 percent, severely missing market
expectations and reinforcing signs of a economic slowdown in the
second quarter. 
    Holdings in SPDR Gold Trust, the largest gold-backed
ETF, are at four-year lows as investors shunned bullion this
year and chose higher-yielding stocks instead. 
   
  Precious metals prices 0737 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1253.16    4.32   +0.35    -25.16
  Spot Silver        19.20   -0.03   -0.16    -36.59
  Spot Platinum    1362.24   -1.26   -0.09    -11.25
  Spot Palladium    698.47    2.47   +0.35      0.93
  COMEX GOLD AUG3  1252.00    6.10   +0.49    -25.29        34942
  COMEX SILVER SEP3  19.19    0.05   +0.25    -36.70         7284
  Euro/Dollar       1.2806
  Dollar/Yen        100.57
 
  COMEX gold and silver contracts show the most active months
 
 (Editing by Muralikumar Anantharaman and Ed Davies)
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