ET:Gold prices hold near one-week high, Bernanke's speech eyed
SINGAPORE: Gold rebounded from light falls to trade near a one-week high on Wednesday, as the dollar fell and investors awaited Federal Reserve Chairman Ben Bernanke's speech later today for clues on whether it will taper stimulus measures soon.
Earlier in the session, gold had slipped after weak Chinese trade data raised fears of an economic slowdown in the world's second-biggest consumer of the metal.
Bullion has fallen nearly 10 per cent since Bernanke said last month the US economy was recovering strongly enough to slow the pace of the Fed's $85 billion monthly bond purchases.
"Some are hoping to see the Fed making an effort to calm the markets," said a Hong Kong-based trader. The trader said prices may see some support if the Fed decides to taper in December or later, instead of current expectations of a September wind down.
Spot gold gained 0.35 per cent to $1,253.16 an ounce by 0737 GMT on Wednesday, after falling as low as $1,243.54 earlier. Comex gold rose $6 to $1,252.
Gold for immediate delivery hit a one-week high of $1,260.01 on Tuesday, helped by higher-than-expected Chinese inflation data and physical demand.
The Fed releases minutes from its June policy meeting at 1800 GMT and Bernanke is due to speak at a conference later on.
Several Fed officials have tried to reassure global markets after Bernanke's comments in June caused panic. Gold fell to a near three-year low of $1,180.71.
The Fed's bond purchases have raised worries about inflation, boosting demand for gold, which is seen as a hedge against rising prices. The stimulus measures have also boosted liquidity overall and driven funds into commodities.
CHINA DATA
Weak Chinese trade data stoked fears of a slowdown in demand for commodities in the world's second-biggest economy.
China has been a big support for gold prices, which have lost a quarter of their value this year due to a possible scale back of US monetary stimulus, outflows from exchange-traded funds (ETFs) and import restrictions in top buyer India.
Wednesday's data showed that China's exports fell 3.1 per cent in June, the first decline since January 2012, while imports dropped 0.7 per cent, severely missing market expectations and reinforcing signs of a economic slowdown in the second quarter.
Holdings in SPDR Gold Trust, the largest gold-backed ETF, are at four-year lows as investors shunned bullion this year and chose higher-yielding stocks instead.
