* Investors await Bernanke's testimony on Wednesday
* Talk of a bail-out for Greece underpins euro
* Fears over potential U.S. rate hikes ease
(Updates prices)
By Maytaal Angel
LONDON, Feb 22 (Reuters) - Gold hit a one-month high on
Monday as the dollar came under pressure from easing fears over
potential U.S. rate hikes, and as talk of a bailout for
debt-ridden Greece underpinned the euro.
Investors have in recent weeks poured money into gold as a
hedge against currency volatility, while the metal's steady
rebound since falling below $1,100 has also ignited technical
buying and boosted sentiment.
Spot gold <XAU=> hit an intraday high of $1,130.65 an ounce
and was quoted at $1,123.65 by 1214 GMT, up from $1,117.50 at
New York's notional close on Friday.
U.S. gold futures also struck a 1-month high, silver gained
more than 1 percent, while platinum and palladium tracked
bullion higher.
"There's a bit of risk coming back into the market, we shook
off the change in U.S. discount rates and the nervousness
disappeared fairly quickly after that. $1,100 is a level being
looked at, if we can hold it there could be further gains to be
made as news from Greece unfolds," said Ole Hanson, analyst at
Saxo Bank.
The dollar weakened on Monday as investors reassessed the
chances of an earlier-than-expected interest rate hike by the
Federal Reserve. []
Currency markets took the Fed's surprise decision to raise
its discount rate last week as a signal the U.S. central bank
was coming closer to raising its benchmark rate. But a benign
U.S. inflation reading on Friday caused markets reassess that
view.
Also limiting the dollar's gains versus the euro were
reports that Germany had prepared plans for aid worth between 20
billion and 25 billion euros for debt-laden Greece.
[]
Falls in the dollar tend to benefit gold as the metal is
traditionally seen as an alternative asset to the U.S. currency.
More recently, however, gold has been bought as a hedge against
volatility in general.
A Finance Ministry spokesman said on Monday Germany had not
made a decision on aid for Greece, but expects the country to be
able to refinance in April. []
VOLATILE
Investors await Fed Chairman Ben Bernanke's twice-yearly
testimony to Congress and the Senate on Wednesday and Thursday
for further clues on rate policy. []
"Markets are set to remain volatile in the week ahead due to
the line-up of economic data and in particular Friday's GDP
reading as players look for sign of continued growth as the Fed
begins to reign in its emergency measures," said James Moore,
analyst at TheBullionDesk.com
Bullion was about 8 percent below a lifetime high above
$1,200 an ounce struck in early December and was moving away
from a three-month low around $1,043 hit almost three weeks ago.
U.S. gold futures for April delivery <GCJ0> rose $1.9 an
ounce to $1,124.00 an ounce. They had hit an intraday high of
$1,131.50 on Monday, its strongest in a month.
Gold priced in euros <XAUEUR=R> held near last week's record
around 830 euros.
Oil rose to a six-week high above $80 a barrel on Monday,
extending the previous session's gains and boosting the appeal
of gold as a hedge against oil-led inflation.
In other precious metals, silver <XAG=> was at $16.43 an
ounce versus $16.27, platinum <XPT=> was at $1,533.00 versus
$1,530 and palladium <XPD=> was at $442 versus $437.
"Silver has finally started to move and that's helping gold
as well. Silver outperforms (gold) in both directions. Over the
last couple of days we've see silver outperform gold by 3
percent -- could be an indication that risk appetite is
returning to metals," Saxo Bank's Hanson said.
(Reporting by Maytaal Angel. Editing by Amanda Cooper)
