* Gold faces support at $1,656 - technicals
* Coming Up: U.S. personal income/spending for July; 1230
By Lewa Pardomuan
SINGAPORE, Aug 30 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.
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
"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
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
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
COMEX gold and silver contracts show the most active months
(Editing by Robert Birsel)