* Traders await congressional testimony from Fed chair
* Technical selling accelerates price dip below $1,100/oz
* Dollar weakens vs the euro, helping gold rise from lows
(Updates prices, adds comment)
By Jan Harvey
LONDON, Feb 24 (Reuters) - Gold recovered some early losses
on Wednesday as the dollar weakened against the euro, but prices
remained under pressure on caution ahead of Federal Reserve
Chairman Ben Bernanke's congressional testimony.
The metal hit its weakest since Feb. 12 at $1,089.45 an
ounce after a break of key resistance levels just below $1,100
an ounce prompted selling. Spot gold <XAU=> was $1,098.15 at
1437 GMT, against $1,102.95 late in New York on Tuesday.
"The market seems to be landlocked and rangebound," said
Pradeep Unni, a senior analyst at Richcomm Global Services.
"Investors seem to be reluctant to enter any fresh trades before
hearing the Fed."
U.S. gold futures for April delivery <GCJ0> on the COMEX
division of the New York Mercantile Exchange slipped $8.80 to
$1,093.90 an ounce.
The dollar held broad gains on Wednesday after weak U.S.
consumer confidence data the previous day stung risk appetite.
The euro however climbed against the U.S. currency. []
Currency traders awaited Ben Bernanke's congressional
testimony, due to begin at 1500 GMT, for clues as to the future
direction of the foreign exchange markets.
Bernanke's testimony was likely to touch on financial
regulation and questions over the central bank's evolving
strategy to remove unprecedented monetary stimulus from the
financial system. []
"If, as we suspect, he maintains the clear stance to a loose
monetary policy, the market will buy dollars on the hoped-for
support this will give the economy," Credit Agricole CIB said in
a note.
"If he signals that the exit strategy is picking up pace,
either the prospect of higher yields will bolster the dollar, or
a nervous market, post the consumer confidence figure, will
worry about activity and swing toward the dollar.
"Hence, without a clear mood change it looks like heads I
win and tails you lose as far as the dollar is concerned."
COMMODITIES SLIP
Among other commodities, oil was little changed and base
metals weakened as below-consensus U.S. consumer confidence data
released on Tuesday continued to blunt appetite for assets
perceived as higher risk. [] []
A drop in bullion prices spurred some buying in parts of
Asia, but main consumer India was on the sidelines. A lack of
activity in China after the Lunar New Year holidays also put
pressure on premiums. []
The China Daily reported on Wednesday, citing an unnamed
official from the China Gold Association, that China was
unlikely to buy 191.3 tonnes of gold being offered for sale by
the International Monetary Fund. []
Silver <XAG=> was flat at $15.82 an ounce, platinum <XPT=>
at $1,503.50 an ounce versus $1,510, and palladium <XPD=> at
$425.50 against $428.50.
South Africa's power regulator on Wednesday granted
state-owned utility Eskom a 24.8 percent tariff increase for the
2010-11 financial year, falling short of the power firm's
request of a 35 percent hike. []
The country is the world's biggest platinum producer and one
of the leading miners of palladium and gold.
"(This) will make mining in South Africa a bit more
expensive, but in the long run it will make it more reliable as
well," said one European platinum group metals trader.
(Reporting by Jan Harvey; Editing by Sue Thomas)
