Gold slips after Bernanke hints at slowing bond buys

Last Updated: Thu, May 23, 2013 03:44 hrs

Gold fell for a third straight session on Thursday after U.S. Federal Reserve Chairman Ben Bernanke hinted at reducing an $85 billion bond-buying programme that has increased the metal's appeal as a hedge against inflation.


Spot gold dropped 0.3 percent to $1,363.96 an ounce by 0018 GMT, holding near a two-year low of $1,321.35 reached in April.

The metal hit a one-week high of $1,414.25 on Wednesday after Bernanke told Congress that the U.S. economy needs further traction before it scales back monetary stimulus. But the price slipped after he said a decision to cut back may come at one of the central bank's "next few meetings" if the economy looked set to maintain momentum.

U.S. gold futures also fell 0.3 percent to $1.362.90 an ounce.

Premiums for gold bars hit a record high in Asia on Wednesday as lower spot prices lured more buyers, mainly in China, the world's second biggest consumer of the precious metal, amid tight physical supplies.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.3 percent to 1,020.07 tonnes on Wednesday, the lowest in more than four years.

Spot silver rose slightly after a two-day fall, while platinum and palladium tracked gold lower.


The dollar hovered at a near three-year high against a basket of major currencies in Asia, having risen broadly as Treasury yields jumped on the prospect that the Fed might scale back its stimulus programme this year.

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