LONDON—The spot price of gold hovered just below $1,550 a troy ounce as investors awaited a key speech on the economic outlook by U.S. Federal Reserve Chairman Ben Bernanke later in the day.
Breaking above $1,550 is proving a difficult hurdle, with the market having only briefly moved above the level a handful of times since it recorded its all-time best of $1,576.52 an ounce May 2. Ahead of the New York day, spot gold was up $2.60, or 0.2%, at $1,546 an ounce.
The main focus of the day is Bernanke's speech in the U.S. afternoon, a London-based trader said. He said investors will be looking for hints on policy, including any suggestion quantitative easing might be extended after the recent string of poor economic indicators out of the world's largest economy.
Gold is widely viewed by the financial markets as an alternative currency and store of value, and subsequently demand often rises during times of economic uncertainty.
While there appears an increasing confidence that disappointing global growth and sovereign debt troubles will help drive gold to fresh highs, the market will need to sustain a break above $1,550/oz before it can get the momentum to push significantly higher, the trader said.
However, UBS analyst Edel Tully said "two weeks of client visits across Asia has made it difficult for us not to feel bullish about gold."
"In China in particular, elevated inflation, the lack of alternative investment options and a supportive government and central bank have helped gold sink deep roots," she said.
Among other metals, spot silver was up 54 cents, or 1.5%, at $37.34 an ounce, spot platinum was up $10, or 0.6%, at $1,820 an ounce and spot palladium was up $16, or 2%, at $802 an ounce.
