PRECIOUS-Gold climbs to 2-1/2 week high on Fed stimulus hopes
* Gold rises for 4th session, up over 5 pct this week * Comex gold up 4 pct, spot silver up 5 pct * U.S. dollar weakens on Bernanke comments (Adds trader comment, updates prices) By A. Ananthalakshmi SINGAPORE, July 11 (Reuters) - Gold jumped to its highest level in more than two weeks on Thursday after Federal Reserve Chairman Ben Bernanke said the U.S. central bank would continue its accommodative monetary policy for now to support the economy. That marks bullion's fourth day of gains in its longest winning streak since mid-April, pushing prices of other precious metals and U.S. gold futures to multi-week highs. Gold, which is still down about 25 percent this year, had taken a beating after Bernanke said in May and June that the Fed could begin tapering its bond purchases later this year. But comments from him on Wednesday suggested that stimulus could last longer, supporting prices of gold as it is typically seen as a hedge against inflation. "Bernanke was quite dovish in his comments. Maybe we won't see a pullback in quantitative easing as quickly as we anticipated," said Amber MacKinnon, an analyst at Nomura Securities in Sydney. "We are likely to see a short-term rally in gold up to around $1,400 and then a fall back to current levels." Spot gold had risen 2 percent to $1,289.49 an ounce by 0638 GMT. It earlier climbed 2.7 percent to $1,298.36 - its highest since June 24. Comex gold jumped as much as 4 percent to a two- and-a-half week high of $1,297.2. Spot silver climbed 4.8 percent to $20.26 - its highest in three weeks. Platinum and palladium jumped to three-week peaks. Spot gold may break a resistance zone of $1,294-$1,302 per ounce and rise more to $1,331, said Reuters technical analyst Wang Tao. CAUTION PERSISTS But traders said there was lingering uncertainty over the outlook for Fed stimulus. "People are cautious. They don't really know what to do as just recently gold fell to a three-year low on tapering comments from the Fed and now they are saying the opposite," said a trader in Hong Kong. Bernanke on June 19 said the U.S. economy was expanding strongly enough for the Fed to begin scaling back its stimulus later this year and end the measures by mid-2014. Physical demand in key markets India and China has been subdued, different from the rush to buy in April when prices dropped about $200 in two days. A near-term rally in spot prices could further hit demand. Precious metals prices 0638 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1289.49 25.85 +2.05 -22.99 Spot Silver 20.09 0.76 +3.93 -33.65 Spot Platinum 1399.50 27.50 +2.00 -8.83 Spot Palladium 724.22 11.72 +1.64 4.66 COMEX GOLD AUG3 1287.90 40.50 +3.25 -23.15 65324 COMEX SILVER SEP3 0.20 0.01 +4.75 -99.34 16902 Euro/Dollar 1.3086 Dollar/Yen 98.70 COMEX gold and silver contracts show the most active months (Reporting by A. Ananthalakshmi; Editing by Michael Perry and Joseph Radford)
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