Gold Near Three-Week High as Investors Await Bernanke Testimony

Gold traded little changed near a three-week high as investors weighed the U.S. Federal Reserve’s next move on monetary stimulus. Assets in the largest bullion-backed exchange-traded product resumed a decline.

Spot gold traded at $1,289.33 an ounce by 9:38 a.m. in Singapore from $1,292.22 yesterday, when prices climbed to $1,295.73 as the dollar weakened. Bullion rose to $1,298.73 on July 11, the highest since June 24, after Fed Chairman Ben S. Bernanke backed sustained asset purchases. Holdings in the SPDR Gold Trust fell to 937.57 metric tons yesterday, after being unchanged for three days.

Bernanke, scheduled to testify before Congress today, said last week that “highly accommodative monetary policy for the foreseeable future is what’s needed.” Gold has fallen 5.9 percent since Bernanke signaled May 22 that the central bank’s bond-purchase program could be tapered should the economy continue to improve. The dollar gained today before U.S. data that may show housing starts increased for a second month.

“Gold in the very near term will be driven by the performance of the dollar, which hinges on what Bernanke may say about the Fed’s stimulus program,” said Lv Jie, an analyst at Cinda Futures Co., a unit of one of four funds in China created to buy bad debt from banks.

Dollar Index

Gold for August delivery traded at $1,291.60 an ounce on the Comex in New York from $1,292 yesterday, when futures gained 0.5 percent. The dollar halted two days of losses after reaching a one-month low yesterday, according to the Bloomberg Dollar Index that tracks the U.S. currency against those of 10 major trading partners.

Silver for immediate delivery fell for the first time in three days, dropping as much as 0.4 percent to $19.9482 an ounce, before trading at $19.968.

Spot platinum was little changed at $1,422.30 an ounce, after rising for seven days, the best streak since January. Palladium lost 0.2 percent to $734.80 an ounce, snapping an eight-day climb that’s the best run since September 2012.

Platinum and palladium are used in jewelry and pollution control devices in cars. European car sales fell to a 20-year low in June as record unemployment in the countries using the euro hurt demand, the Brussels-based European Automobile Manufacturers’ Association said yesterday.

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