July 16, 2013 / 3:36 AM / 4 years ago

PRECIOUS-Gold marks time before Bernanke testimony

* Buying interest from China subdued
    * Markets eye Bernanke testimony on Wednesday and Thursday
    * Asian shares higher, dollar slips 

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, July 16 (Reuters) - Gold was little changed on
Tuesday as investors awaited Federal Reserve Chairman Ben
Bernanke's congressional testimony later this week for clues on
when the U.S. central bank would begin tapering its monetary
    Buying from China, which usually provides support for gold
during Asian trading hours, was also subdued as traders waited
on the sidelines for clear direction from the Fed. 
    Prices have been stuck in a tight range for the last three
trading sessions, with gold failing to cross the $1,300 mark
-even after a sharp jump last week.
    "The Fed will try to calm the markets and make them think it
will not exit soon," said a Hong Kong-based trader. "They might
wait for data points for the next few months to make a call."
    The trader said it was still not clear if the Fed's comments
from last week meant the stimulus-tapering would begin only next
year versus market fears of a September scale-back. 
    Bernanke said last month the U.S. economy was recovering
strongly enough for the Fed to begin pulling back its $85
billion monthly bond purchases over the next few months. 
    But following the market panic that then ensued, he said
last week that a "highly accommodative policy is needed for the
foreseeable future". 
    The market is now focused on Bernanke's twice-yearly
testimony to congressional committees on Wednesday and Thursday,
which will be watched for further signs of the timing and extent
of any reduction in bond purchases.
    Bullion gained 5 percent last week - its biggest weekly gain
in nearly two years - on hopes that the stimulus would continue.
    Spot gold was down $1 at $1,281.00 an ounce by 0654
GMT, while U.S. gold fell 0.3 percent to $1279.80.
    Gold's appeal as a safe-haven has been tarnished this year
by a stronger dollar and stock markets, and rapid outflows from
gold-backed exchange traded funds. 
    The top eight gold ETFs have seen holdings drop by about 19
million ounces, or $24 billion at current prices, so far this
year, according to Thomson Reuters data. 
    Though gold is near three-year lows, physical demand in top
buyers India and China has failed to pick up to record levels
seen in April, when prices dropped $200 in two days.
  Precious metals prices 0654 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1281.00   -0.99   -0.08    -23.50
  Spot Silver        19.78   -0.11   -0.55    -34.68
  Spot Platinum    1414.50   -7.50   -0.53     -7.85
  Spot Palladium    728.47   -0.03   -0.00      5.27
  COMEX GOLD AUG3  1279.80   -3.70   -0.29    -23.63        19629
  COMEX SILVER SEP3  19.78   -0.06   -0.32    -34.75         4540
  Euro/Dollar       1.3077
  Dollar/Yen         99.94
  COMEX gold and silver contracts show the most active months
 (Reporting by A. Ananthalakshmi; Editing by Eric Meijer)

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