Gold hovered near a five-month peak on Monday, supported by hopes for more stimulus measures after U.S. Federal Reserve Chairman Ben Bernanke gave a grave assessment of the economy last week. Spot gold had edged down 0.3 percent to $1,686.43 an ounce by 0016 GMT, easing from a five-month high of $1,692.71 hit on Friday. U.S. gold was little changed at $1,689. Bernanke on Friday left the door wide open to a further easing of monetary policy, saying the stagnation in the U.S. labour market was a grave concern, but he stopped short of providing a clear signal of imminent action. Bullion is seen as a hedge against inflation. Hedge fund and money managers boosted their net long positions in U.S. gold futures and options to the highest level in more than five months in the week ending Aug.28, as gold broke above a long-held range on hopes for more stimulus measures. China's official factory purchasing managers' index fell to a lower-than-expected 49.2 in August from 50.1 in July, official data showed on Saturday, a result that is likely to strengthen the case for further policy steps to bolster growth. Euro zone inflation jumped more than expected in August, data showed on Friday, likely reducing chances that the European Central Bank will cut interest rates next Thursday. Talks to end a deadly strike at the South African mining operations of world No. 3 platinum producer Lonmin resume on Monday after weekend funerals for over 30 workers killed by police.

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