* Gold struggles as euro lets go of gains vs dollar
* Tight ranges anticipated on uncertainty over Fed's path
* Bernanke's testimony seen as key
(Updates prices, adds quotes)
By Veronica Brown
LONDON, Feb 23 (Reuters) - Gold eased on Tuesday as the euro
lost ground versus the dollar and as the market sought more
clarity on U.S. interest rates, looking to this week's testimony
from Federal Reserve Chairman Ben Bernanke for direction.
Spot gold stood at $1,111.70 per ounce by 1258 GMT <XAU=>,
compared with $1,113.60 quoted late in New York on Monday, well
away from recent one-month highs. U.S. gold futures for April
delivery <GCJ0> fell 10 cents to $1,113.00.
Prices lost support in tandem with the euro relinquishing
earlier gains versus the dollar <EUR=>, making dollar-priced
gold less attractive for non-U.S. investors.
The euro stalled after the German Ifo institute's indices
for Germany's business climate and current conditions fell more
than forecast in February. []
Dealers and analysts said attempts at rallies were failing
as the market concentrated on U.S. monetary policy after the
Federal Reserve tightened its emergency lending rate last week.
"People are holding back until more data starts to come out
and Bernanke's testimony. It's a bit of a pause," Mitsubishi
analyst Tom Kendall said.
San Francisco Federal Reserve Bank President Janet Yellen
said the U.S. economy still needed extraordinary low interest
rates as inflation was "undesirably low".
Bernanke gives testimony to Congress on Wednesday and
Thursday.
"The market as a whole understands that this is the
beginning of a process that's going to emerge and will take
several years to run to its conclusion in terms of tightening
monetary policy again. But the issue is timing," Kendall added.
CONSTRUCTIVE
While bullion fell with other key commodities last week
after the Fed's emergency lending move, some analysts said the
outlook remained constructive for gold, which as a non-interest
rate bearing asset benefits from a low rate environment.
Dealers also said gold was benefitting in non-dollar terms
from sovereign risks surrounding some euro zone countries --
notably Greece. Gold priced in euros stayed near to a record
high hit last week <XAUEUR=R>.
"Gold still transforming into a currency from a commodity so
you need to watch it in non-US$ currencies," said Simon weeks,
director, bullion sales at Bank of Novia Scotia in London.
On the flipside Commerzbank said in a note to clients that
low inflation, also discussed by the Fed's Yellen, should have
an adverse impact, "as gold loses its appeal as a hedging
instrument against inflation risks".
"We continue to expect the gold price to move sideways
within the trading range of between $1,050 and $1,150 per ounce
that has been in place since mid-December," the Bank added.
On the investment front, the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust <GLD>, said its holdings
stood at 1,107.901 tonnes as of Feb. 22, up 0.305 tonnes from
the previous business day. []
In other precious metals silver eased in line with gold to
$16.17 per ounce <XAG=> from $16.20 quoted late in New York on
Monday. Platinum firmed to $1,531.00 from $1,521.50 <XPT=>,
while palladium stood at $441.00 from $440.00 <XPD=>.
(Additional reporting by Lewa Pardomuan in Singapore; editing
by Sue Thomas)
