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BookmarkMarket looks to Yellen comments set for Thursday
* Dollar flat, U.S. bond yields fall
* Lack of physical demand could weaken prices
By Clara Denina
LONDON, Nov 13 (Reuters) – Gold rose on Wednesday, snapping a four-day fall, after U.S. Federal Reserve officials gave mixed signals on the timing for rolling back monetary stimulus and the dollar stabilised.
In the absence of U.S. economic data, investors remained focused on comments from Atlanta Fed President Dennis Lockhart, who did not rule out on Tuesday a tapering of the quantitative easing programme at the Dec. 17-18 policy meeting, though he also said the Fed should keep policy very easy.
Spot gold gained 0.5 percent to $1,274.10 an ounce by 1458 GMT. It was still not far from a four-week low hit on Tuesday, when it fell as much as 1.7 percent to $1,260.89, its lowest since Oct. 15.
Attention now is on comments that Fed President nominee Janet Yellen will make at her Senate confirmation hearing on Thursday.
“The bullion market is going to keep tracking dollar’s movements and stay tuned on Yellen’s message tomorrow and anything that is said about Fed tapering,” MKS SA senior vice president Bernard Sin said.
Comex gold futures for December edged up $1.60 to $1,272.70 an ounce. Traders also said that there has been some unwinding of futures positions as participants prepare to roll over to the next trading month of February.
Technically, the metal looks supported at $1,260 an ounce, while resistance stands in the $1,277-$1,281 area, ANZ analysts said.
The dollar was little changed against a basket of currencies, while 10-year U.S. yields fell to 2.74 percent, having risen almost 20 basis points since the payroll data last Friday.
As gold pays no interest, movements in returns from U.S. bonds are closely watched by the bullion market.
The timing of any tapering of the Fed’s $85 billion in monthly bond purchases has been a key factor driving gold prices this year. The metal has lost a fifth of its value so far after the central bank signalled it would start rolling back its stimulus before year-end.
Gold’s drop below $1,300 has failed to attract buyers in Asia as customers expect prices to weaken further, analysts said.
“(There is) very anaemic bullion trading at the moment as physical players in Asia choose to stay away, with … still some time before Chinese seasonal buying intensifies ahead of the Lunar New Year celebrations,” VTB Capital said in a note.
Dealers said physical demand had failed to pick up due to weaker regional currencies in Asia.
Silver was down 0.5 percent at $20.60 an ounce after dropping 3 percent in the previous session to a four-week low.
Spot platinum was up 0.1 percent at $1,430.75 an ounce and spot palladium fell 0.1 percent to $736.75 an ounce.
