* Gold pressured after Fed says ready to act if necessary
* U.S. growth slows more sharply than first thought
* Coming up: U.S. personal income due Monday
(Recasts, adds comment, updates prices to market close, changes
byline/dateline, previous LONDON)
By Frank Tang
NEW YORK, Aug 27 (Reuters) - Gold trimmed gains on Friday after
Federal Reserve chief Ben Bernanke said the Fed was ready to act on
growth if needed, but the metal posted a fourth straight week of
increase as recent weak economic data boosted its safe-haven appeal.
Bullion has benefited from fears of a double-dip recession as
durable-goods orders and home sales data this week pointed to a
stalling economic recovery.
(Graphic: http://link.reuters.com/kuv45m)
On Friday, Bernanke said the economic recovery had weakened more
than expected and the U.S. central bank stood ready to act if
necessary to spur growth. []
"The fact that the economy is not where the Fed wants it to be,
and that the Fed is willing to do whatever it needs to spur economic
growth, translates into good gains in the stock market," COMEX gold
floor trader Mihir Dange said.
Gold gave up some early gains on a Wall Street rally as
Bernanke's comment about Fed readiness fueled risk appetite, denting
gold's appeal as an alternative investment. The S&P 500 index rose
1.66 percent.
Spot gold <XAU=> was last at $1,235.85 an ounce at 3:14 p.m. EDT
(1914 GMT) from $1,234.94 late in New York on Thursday. U.S. gold
futures for December delivery <GCZ0> settled up 20 cents at
$1,237.90.
Gold hit a session high of $1,242.25 an ounce after data showed
U.S. growth slowed more sharply than initially thought in the second
quarter. []
The metal's trend has turned bullish since it hit a low at $1,160
on July 18, with the Fed having downgraded its economic outlook
earlier in August. Gold is on track to rise 5 percent this month.
Eugen Weinberg, commodities analyst at Commerzbank, said
Bernanke's remarks meant the Fed was ready to use more
quantitative-easing tools, raising the possibility of inflation,
which would be bullish for gold.
Analysts say further quantitative easing could potentially see
gold heading back towards its record high at $1,264.90 an ounce seen
on June 21. []
Gold broke out of the relatively narrow range it had kept for
much of the summer to hit a two-month high of $1,244 an ounce on
Thursday as investors fretted about the U.S. economy.
STIMULUS MEASURES
Analysts were optimistic towards a recovery in physical demand
from major consumers such as India. A Reuters poll showed India's
gold imports could rise to 504.5 tonnes this year. []
Physical gold demand also tends to rise in August as jewelers
stockpile inventory ahead of India's festival season, which starts
with Raksha Bandhan on Aug. 24 and extends until Dhanteras in
November, the biggest gold-buying day.
The gold market will closely monitor another round of economic
data out of the United States next week, including personal income on
Monday, consumer confidence on Tuesday, auto sales on Wednesday, and
August nonfarm payrolls on Friday.
Silver <XAG=> was at $19.03 an ounce versus $18.90. The metal has
retreated from the two-month highs it hit on Thursday at $19.15 an
ounce, but rose 5 percent this week, its biggest one-week climb since
early April.
The ratio of gold to silver -- how many ounces of silver are
needed to buy an ounce of gold -- slipped to its lowest since early
August at about 65 as the white metal became increasingly expensive
compared to gold.
Platinum <XPT=> was at $1,529.00 an ounce against $1,525, while
palladium <XPD=> was at $504 against $497.63.
Prices at 3:23 p.m. EDT (1923 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1237.90 0.20 0.0% 12.9%
US silver <SIU0> 19.039 0.057 0.0% 13.0%
US platinum <PLV0> 1537.00 -2.90 -0.2% 4.5%
US palladium <PAU0> 503.05 0.55 0.1% 23.0%
Gold <XAU=> 1235.55 0.61 0.0% 12.7%
Silver <XAG=> 19.03 0.13 0.7% 13.0%
Platinum <XPT=> 1529.50 3.50 0.3% 4.4%
Palladium <XPD=> 504.00 6.37 1.3% 24.3%
Gold Fix <XAUFIX=> 1235.00 0.50 0.0% 11.9%
Silver Fix <XAGFIX=> 19.03 -8.00 -0.4% 12.0%
Platinum Fix <XPTFIX=> 1530.00 0.00 0.0% 4.4%
Palladium Fix <XPDFIX=> 503.00 3.00 0.6% 25.1%
(Additional reporting by Jan Harvey and Pratima Desai in London;
Editing by Dale Hudson)
