LONDON—The spot price of gold edged higher, with buying interest softened by the summer lull and caution ahead of Friday's European bank stress-test results.
The market is also hoping for some direction from Federal Reserve Chairman Ben Bernanke's semi-annual testimony to U.S. Congress, due to commence at 10 a.m. EDT, analysts said. It is expected he will seek to alleviate some of the worries regarding the economic recovery, including concerns of a dip back into recession.
Spot gold recently traded up $2.20, or 0.2%, at $1,194.40 a troy ounce.
Spot gold hit a new two-month low of $1,175 Tuesday before rallying after the U.S. Commerce Department reported housing starts fell by a more-than-expected 5% in June and Goldman Sachs delivered disappointing results.
TheBullionDesk analyst James Moore said: "The fact gold also rallied yesterday while SPDR ETF holdings declined is encouraging, but with risk appetite improving as European debt fears improve, gold overshadowed by top heavy technical outlook and limited physical demand the current consolidation phase may have further to run."
Among other precious metals, spot silver was at $17.79 an ounce, up 0.5%; spot platinum was at $1,519 an ounce, up 0.3%; and spot palladium was at $449 an ounce, down 0.4%.
Write to Rhiannon Hoyle at rhiannon.hoyle@dowjones.com
