PRECIOUS-Gold eases as euro loses traction, Bernanke eyed

* Gold struggles as euro lets go of gains vs dollar

* Tight ranges anticipated on uncertainty over Fed’s path

* Bernanke’s testimony seen as key

(Recasts, changes dateline to from SINGAPORE)

By Veronica Brown

LONDON, Feb 23 (BestGrowthStock) – Gold eased on Tuesday as the euro
lost ground versus the dollar and as the market sought more
clarity on U.S. interest rates, looking to this week’s testimony
from Federal Reserve Chairman Ben Bernanke for direction.

Spot gold stood at $1,110.30 per ounce by 1130 GMT, compared
with $1,113.60 quoted late in new York on Monday, well away from
recent one-month highs. U.S. gold futures for April delivery
(GCJO: ) fell $1.80 to $1,111.30.

Prices lost support in tandem with the euro relinquishing
early gains versus the dollar (EUR=: ), making dollar-priced gold
less attractive for non-U.S. investors.

Dealers and analysts said any attempts at rallies were
stalling as the market concentrated on future U.S. monetary
policy after the Federal Reserve tightened its emergency lending
rate last week.

“People are holding back until more data starts to come out
and Bernanke’s testimony. It’s a bit of a pause,” Mitsubishi
analyst Tom Kendall said.

San Francisco Federal Reserve Bank President Janet Yellen
said the U.S. economy still needed extraordinary low interest
rates as inflation was “undesirably low”.

Bernanke gives testimony to Congress on Wednesday and
Thursday.

“The market as a whole understands that this is the
beginning of a process that’s going to emerge and will take
several years to run to its conclusion in terms of tightening
monetary policy again. But the issue is timing,” Kendall added.

CONSTRUCTIVE

While gold fell with other key commodities last week after
the Fed’s emergency lending rate move, analysts said the outlook
was still constructive for the metal, which as a non-interest
rate bearing asset benefits from a low rate environment.

Dealers also said gold was benefitting in non-dollar terms
from sovereign risks surrounding some euro zone countries —
notably Greece. Gold priced in euros stayed near to a record
high hit last week (XAUEUR=R: ).

“Gold still transforming into a currency from a commodity so
you need to watch it in non-US$ currencies,” said Simon weeks,
director, bullion sales at Bank of Novia Scotia in London.

David Barclay, commodity strategist at Standard Chartered in
Hong Kong said there was still scope for the dollar to rally
further on the back of uncertainties in Greece.

“But given that gold has recently been resilient to dollar
strength and that correlations between the two have weakened,
this bodes well for gold if the dollar does bounce a little
further.”

On the investment front, the world’s largest gold-backed
exchange-traded fund, SPDR Gold Trust (GLD: ), said its holdings
stood at 1,107.901 tonnes as of Feb. 22, up 0.305 tonnes from
the previous business day. [GOL/SPDR]

In other precious metals silver fell in line with gold to
$16.10 per ounce (XAG=: ) from $16.20 quoted late in New York on
Monday. Platinum firmed to $1,526.00 from $1,521.50, while
palladium stood at $438.00 from $440.00.

Investing Analysis

(Additional reporting by Lewa Pardomuan in Singapore; editing
by Sue Thomas)

PRECIOUS-Gold eases as euro loses traction, Bernanke eyed