SINGAPORE, May 22 (Reuters) - Gold edged higher on
Wednesday, buoyed by a weaker dollar after Federal Reserve
officials dampened expectations that the U.S. central bank may
soon exit its bullion-friendly bond purchases.
FUNDAMENTALS
* Spot gold rose 0.3 percent to $1,379.56 an ounce by
0108 GMT, but remains not far off a two-year low. Spot silver
gained 1 percent to $22.61 an ounce, regaining more
ground after dropping to 2-1/2-year lows earlier this week.
* U.S. gold was little changed at $1,378.80 an
ounce.
* Gold has been pressured in recent weeks by fears the
Federal Reserve could scale back or halt its monthly $85 billion
bond purchases that have buoyed bullion's appeal as a hedge
against inflation.
* But New York Fed President William Dudley and St. Louis
Fed chief James Bullard, who will both vote at the June 18-19
meeting, made clear further economic progress was needed before
they would support curtailing bond purchases.
* Investors are eyeing Fed Chairman Ben Bernanke's testimony
in Congress about the state of the U.S. economy later in the day
for clues to his stance on ending the monetary stimulus this
year. The Federal Open Market Committee also releases the
minutes of its April 30-May 1 meeting.
* Gold's recent slump could have much further to run, with a
breach of its April low of $1,321.35 potentially setting up
bigger losses towards levels not seen since mid-2010, according
to chart analysts.
* The Bank of Japan may front-load bond purchases or offer
funds via market operations more frequently if bond market
turbulence persists, hoping it can prevent a renewed spike in
yields by fine-tuning market operations.
* Holdings of the largest gold-backed exchange-traded-fund,
New York's SPDR Gold Trust fell 0.8 percent on Tuesday to
1,023.08 tonnes, the lowest in more than four years.
MARKET NEWS
* Asian stocks rose on Wednesday following a positive lead
from Wall Street with Japan's Nikkei reaching a 5-1/2 year high,
while the yen took a defensive stance ahead of the outcome of
the Bank of Japan's policy meeting.
DATA/EVENTS (GMT)
N/A Bank of Japan announces monetary policy decision
0800 Euro zone Current account
1400 U.S. Existing home sales
1400 Fed Chairman Bernanke testifies on economic outlook
before U.S. congressional committee
1800 FOMC releases minutes of April 30-May 1 meeting
Precious metals prices 0108 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1379.56 4.12 +0.30 -17.62
Spot Silver 22.61 0.23 +1.03 -25.33
Spot Platinum 1465.74 8.74 +0.60 -4.51
Spot Palladium 744.97 1.47 +0.20 7.65
COMEX GOLD JUN3 1378.80 1.20 +0.09 -17.72 5899
COMEX SILVER JUL3 22.58 0.12 +0.53 -25.32 1420
Euro/Dollar 1.2923
Dollar/Yen 102.58
COMEX gold and silver contracts show the most active months
(Reporting by A. Ananthalakshmi; Editing by Manolo Serapio Jr.
and Richard Pullin)
