* Bernanke's comments signal 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 details, updates prices to market close)
By Frank Tang
NEW YORK, Feb 9 (Reuters) - Gold was little changed on
Wednesday as the market was underpinned by a dollar drop and
Federal Reserve Chairman Ben Bernanke's comment that he had no
plans to scrap a massive bond-buying program, indicating
interest rates will not rise any time soon.
In testimony to Congress, Bernanke suggested U.S. economic
conditions were still too weak for the central bank to pull
back on its vast monetary stimulus, despite a welcome drop in
the jobless rate. []
"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,
a precious metals and energy analyst at 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=> slipped 0.1 percent to $1,362.04 an ounce
by 3:02 p.m. EST (2002 GMT).
U.S. gold futures for April delivery <GCJ1> settled up
$1.40 at $1,365.50. Trading volume nearly halved its 30-day
average, in line with weaker turnover in the past several
sessions.
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 toward $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 realization 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 experienced 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 0.7 percent to $30.11 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 -- fell to near a five-year low.
(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 industrial aspects," MF Global's Pawlicki said.
However, increasing acceptance of physical gold bullion as
collateral by banks and exchanges could provide support to the
prices of the yellow metal, Pawlicki said.
Earlier this week, J.P. Morgan Chase <JPM.N> said it would
accept physical gold as collateral with its counterparties as a
growing number of clients look to use bullion as a hedge
against inflation.
LCH.Clearnet also said it was hoping to accept gold as
collateral later this year. [] []
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 0.2 percent to $1,850.99 an ounce,
while palladium <XPD=> dropped 1.4 percent to $826.45.
Prices at 3:11 p.m. EST (2011 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1365.50 1.40 0.1% -3.9%
US silver <SIH1> 30.276 0.005 0.0% -2.1%
US platinum <PLJ1> 1859.40 -2.50 -0.1% 4.6%
US palladium <PAH1> 826.45 -12.00 -1.4% 2.9%
Gold <XAU=> 1362.06 -1.53 -0.1% -4.0%
Silver <XAG=> 30.12 -0.19 -0.6% -2.4%
Platinum <XPT=> 1851.24 -4.00 -0.2% 4.7%
Palladium <XPD=> 823.72 -12.00 -1.4% 3.0%
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
Walter Bagley)
