* Bernanke's job view signaled policy to stay accommodative
* Gold-silver ratio down, silver benefits from industrials
* Platinum, palladium rally to multi-year highs
* Coming up: U.S. initial jobless claims Thursday
(Recasts, adds comments, updates prices, new byline,
dateline previously LONDON)
By Frank Tang
NEW YORK, Feb 9 (Reuters) - Gold inched up on Wednesday as
the dollar fell and after Federal Reserve Chairman Ben Bernanke
said he has no plans to scrap a massive bond-buying program,
suggesting interest rate will not rise anytime soon.
Bernanke told Congress that U.S. unemployment is too high
despite an improving economy, and he also warned about the
dangers of unsustainable budget deficits. []
"I saw the positives to gold in Bernanke's comments. It
seems that he's going to maintain the QE2 policy in place, and
that's a bullish argument for commodities," said Tom Pawlicki,
precious metals and energy analyst of MF Global.
In November, the Fed launched a plan to buy $600 billion in
government debt to keep borrowing costs low to stimulate the
economy, a process known as quantitative easing.
Gold was trying to restore upward momentum after gaining
more than 4 percent in the past 10 days, and a rise in Chinese
interest rates for the second time in just over six weeks
benefited gold's status as an inflation hedge.
Spot gold <XAU=> rose 0.1 percent to $1,364.24 an ounce by
1:40 p.m. EST (1840 GMT). U.S. gold futures for April delivery
<GCJ1> gained $1.1 to $1,365.20.
Bullion buying increased as the dollar faltered against the
euro and as U.S. bond yields fell after a seven-session winning
streak following a solid auction of 10-year Treasury notes,
traders said. [] []
A run of well-received economic data in January had taken
the wind out of gold's sails and increased speculation that a
correction was due, pushing prices back towards $1,300 an
ounce.
"A lot of speculative (investors) that had gone in at the
end of last year clearly saw growth being reignited and they
got scared," said London & Capital portfolio manager Pau
Morilla Giner. "They thought that gold would lose its appeal."
"But the long-term money in gold is still there," he said.
"The realisation is that economic news has been better than
expected because the stimulus that has been applied has been
extraordinary."
Holdings of the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust, dipped to 1,228.56 tonnes on Tuesday
from 1,228.864 tonnes the previous day, although the hefty
outflows seen in January have apparently been staunched.
The SPDR fund saw its second-biggest monthly outflow and
the main silver ETF, the iShares Silver Trust, its biggest ever
outflow last month, adding downward momentum to precious metal
prices.
GOLD-SILVER RATIO DROPS
Silver <XAG=> eased a penny to $30.30 an ounce, after
reaching its highest price since Jan. 4 on Tuesday at $30.84 an
ounce.
The gold-silver ratio -- the number of silver ounces needed
to buy an ounce of gold -- recovered from the near five-year
low below 45 it reached on Tuesday to just above that level.
(Graphic: http://link.reuters.com/pas87r)
"Traders are trying to play the industrial uses of silver.
As the economic data has improved, they bought silver over
gold, thinking that they would benefit from both silver's
precious and the industrial aspects," MF Global's Pawlicki
said.
He said that the gold-silver ratio could fall further as
the economy recovery continues.
Platinum and palladium rose back to multi-year highs on
Wednesday at $1,865 and $836.75 an ounce respectively, boosted
by firmer gold prices, a softer dollar, and expectations that
demand from carmakers for the autocatalyst metals will
improve.
Platinum <XPT=> slipped 0.1 percent to $1,853.24 an ounce,
while palladium <XPD=> dropped 1 percent to $827.50.
Prices at 1:43 p.m. EST (1843 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCJ1> 1365.10 1.00 0.1% -4.0%
US silver <SIH1> 30.295 0.024 0.1% -2.1%
US platinum <PLJ1> 1859.10 -2.80 -0.2% 4.5%
US palladium <PAH1> 830.00 -8.45 -1.0% 3.3%
Gold <XAU=> 1364.25 0.66 0.0% -3.9%
Silver <XAG=> 30.30 -0.01 0.0% -1.8%
Platinum <XPT=> 1853.24 -2.00 -0.1% 4.9%
Palladium <XPD=> 827.50 -8.22 -1.0% 3.5%
Gold Fix <XAUFIX=> 1365.00 2.50 0.2% -3.2%
Silver Fix <XAGFIX=> 30.22 80.00 2.7% -1.3%
Platinum Fix <XPTFIX=> 1858.00 5.00 0.3% 7.3%
Palladium Fix <XPDFIX=> 835.00 1.00 0.1% 5.6%
(Additional reporting by Jan Harvey in London; Editing by
Marguerita Choy)
