* Gold retreats on dollar rise, no details from Bernanke
* Bullion weakens on mixed market signals outside of gold
* Coming up: U.S. September industrial output due Monday
(Recasts, updates with comment and market activity, changes
byline/dateline, previous LONDON)
By Frank Tang
NEW YORK, Oct 15 (Reuters) - Gold fell on Friday, snapping
a two-day record-setting rally, as the dollar rose and Fed
Chairman Ben Bernanke offered few new details on further
economic stimulus which prompted investors to take profits.
In a day of volatile trade and a host of mixed market
signals, bullion is still on track to end higher for an 11th
straight week, driven by a hardening view that the Fed will
resume buying government debt to stimulate the economy.
On Friday, Bernanke delivered his most explicit signal yet
that the U.S. central bank is likely to ease as soon as its
next meeting in November. But he failed to offer the details
that some gold investors are craving to sustain the rally.
"The question is for how much longer the market is prepared
to run just on the quantitative easing story. I think the
market at these levels wants to see the facts before committing
additional capital to the upside," said Saxo Bank senior
manager Ole Hansen.
Gold rose to within two dollars of Thursday's all-time high
at $1,387.10 an ounce on a knee-jerk rally immediately
following Bernanke's remarks, which initially hit the dollar.
But the metal later weakened as the dollar rebounded
sharply from a more than eight-month low versus the euro as
traders said the greenback's recent declines were overdone.
[]
Spot gold <XAU=> was trading down 0.6 percent at $1,368.95
an ounce at 1:44 p.m. EDT (1744 GMT). U.S. gold futures for
December delivery <GCZ0> fell $8.50 to $1,369.10.
Gold investors opted to lock in profits ahead of the
weekend on a day when financial markets were driven by myriad
diverse factors.
U.S. Treasury bonds fell as traders bet on simmering
inflation after Bernanke's speech and weak consumer price data
lent pressure. Wall Street slid as bank shares sank on concerns
about the widening foreclosure crisis. [] []
[]
In a highly anticipated speech Friday, Bernanke said there
was a case for further monetary easing given high unemployment
and low inflation, but he offered no details on the central
bank's next step. []
"Some investors may have been disappointed that Bernanke
did not give a clear commitment that some people are hoping
for, that the Fed will unleash the quantitative easing gun at
its next FOMC meeting," said Peter Buchanan, senior economist
at CIBC World Markets.
However, Bernanke said Fed policymakers were still weighing
how aggressive they should be if they decide to pursue a
further round of asset buying, or quantitative easing, to push
borrowing costs lower.
Stronger-than-expected September U.S. retail sales and
manufacturing activity in New York State reduced investor
anxiety somewhat and triggered profit-taking in gold which is
viewed as a safe haven investment.
CURRENCY WAR
Gold has climbed some 25 percent this year as the prospect
of further quantitative easing in the United States undermined
the dollar and prompted investors to buy the precious metal as
a hedge against currency depreciation.
Gold benefited as an alternative reserve currency as
countries raced to adopt easier monetary policy and to
depreciate their own currencies to boost growth.
"Politicans are likely to continue with the easing route,
which is to continue printing money, allowing inflation to rise
and their currencies to devalue against others. We see now the
so-called currency war increasing in intensity between the
major economic powers," said Angelos Damaskos, a fund manager
and principal adviser of Sector Investment Managers.
This was likely to lead to an increasing tendency among
investors and currency holders to diversify into gold, he
said.
Among other precious metals, silver <XAG=> fell 1.5 percent
to $24.24, platinum <XPT=> slipped 0.9 percent $1,690 an ounce
and palladium <XPD=> was trading down 2.1 percent at $585 an
ounce.
Prices at 1:54 p.m. EDT (1754 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCZ0> 1367.90 -9.70 -0.7% 24.8%
US silver <SIZ0> 24.235 -0.200 -0.8% 43.9%
US platinum <PLF1> 1695.40 -17.20 -1.0% 15.3%
US palladium <PAZ0> 586.75 -14.80 -2.5% 43.5%
Gold <XAU=> 1367.45 -9.30 -0.7% 24.7%
Silver <XAG=> 24.22 -0.39 -1.6% 43.8%
Platinum <XPT=> 1690.50 -13.65 -0.8% 15.4%
Palladium <XPD=> 586.50 -10.95 -1.8% 44.6%
Gold Fix <XAUFIX=> 1367.50 -9.75 -0.7% 23.9%
Silver Fix <XAGFIX=> 24.42 -7.00 -0.3% 43.7%
Platinum Fix <XPTFIX=> 1691.00 10.00 0.6% 15.3%
Palladium Fix <XPDFIX=> 591.00 6.00 1.0% 47.0%
(Additional reporting by Jan Harvey in London; editing by Jim
Marshall)
