Gold slips, tracking higher dollar ahead of Bernanke testimony

Gold eased on Wednesday but stayed near a three-week high, as the dollar gained ahead of keenly awaited congressional testimony by U.S. Federal Reserve Chairman Ben Bernanke later in the day.. Bullion prices have traded in a tight range over the last few sessions as investors held back on big bets ahead of the testimony, which they hope will provide a clear outlook regarding the Fed's $85-billion monthly bond purchases.. Slowing physical demand also contributed to the market's cautious undertone.. "The trend is unclear, so gold is just following the dollar," said Peter Fung, head of dealing at Hong Kong's Wing Fung Precious Metals.. "We are not sure what to expect from Bernanke as he has made contrasting comments over the last few weeks. Gold is waiting for guidance from him," said Fung.. The Fed's bond purchases have boosted market liquidity, benefiting gold and other commodities. They have also kept the dollar subdued, driving purchases of commodities by holders of other currencies.. Spot gold fell 0.3 per cent to $1,287.76 an ounce. U.S. gold lost about $4 to $1,286.80.. The dollar inched up 0.2 per cent on Wednesday, but was not far from a three-week low.. Gold has swayed between sharp gains and losses in the last few weeks, following mixed comments from the Fed about the likely timing of a scale-back in monetary stimulus.. Bernanke said last month the U.S. economy was recovering strongly enough for the Fed to begin pulling back bond purchases over the next few months. But following the market panic that ensued, he said last week that a "highly accommodative policy is needed for the foreseeable future".. Slowing demand Gold hit a three-week high of $1,298.36 on Thursday but has struggled to cross the $1,300 level. Physical demand has also taken a pause as prices have bounced off recent lows.. Buying interest from China has been subdued over the last few days, as indicated by Shanghai premiums, which have eased to around $25 per ounce from $36 from last week.. "Demand has quieted down. Though we are still seeing strong demand for gold kilo bars," said Brian Lan, managing director of Singapore-based dealer GoldSilver Central Pte Ltd.. Outflows from SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, resumed after a three-day pause. Holdings of the fund fell to 937.57 tonnes on Tuesday, their lowest in four years.. Copyright: Thomson Reuters 2013

Gold slips, tracking higher dollar ahead of Bernanke testimony

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