(Recasts after Bernanke testimony)
By Atul Prakash
LONDON, Jan 17 (Reuters) - Gold slipped further away from
record highs on Thursday, but was given a slight lift when the
dollar fell after testimony by U.S. Federal Reserve Chairman Ben
Bernanke, analysts said.
Movements in currency markets are dominating gold trading
and a fall in the dollar helped bullion after Bernanke told a
congressional committee that more interest rate cuts might be
needed and that the U.S. economic outlook had worsened.
Spot gold <XAU=> fell as low as $878 an ounce, before rising
slightly to a quote of $886.90/887.60 by 1546 GMT, against
$885.60/886.30 late in New York on Wednesday, when it dropped
more than 1 percent. It hit a record high at $914 on Monday.
"Given the recent volatility, wide intra-day price swings
seem set to continue," said James Moore, precious metals analyst
at TheBullionDesk.com.
"Ultimately, the troubles with the U.S. economy, coupled
with geopolitical tensions and its recent strong performance,
will continue to draw investors towards the market and push gold
to higher levels in the coming sessions," he said.
Gold was supported at $865 per ounce, UBS analyst Robin Bhar
said.
"On the upside, a break of Wednesday's high of $900/oz will
point to imminent new highs. We hold our forecast of $850/oz in
one-month and $800/oz in three months."
The euro <EUR=> was up 0.2 percent to 1.4685 <EUR=>, and the
dollar fell 0.4 percent versus the yen.
A firmer dollar makes gold costlier for holders of other
currencies and often lowers bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Oil steadied near $91 per barrel, recovering from losses of
more than $3 in the past two days as a hefty rise in U.S. stocks
compounded concerns of a slowing economy in the world's top
energy consumer.
LONG-TERM OUTLOOK BULLISH
Goldman Sachs raised its 2008 gold price forecast to $915
per ounce from $800, factoring in an expected U.S. recession in
the second and third quarters that would lead to a weaker
dollar. []
London-based ETF securities expected to more than double the
money managed in its listed exchange traded commodity funds,
including precious metals, to about $7 billion by the end of
2008. []
In other bullion markets, the key gold futures contract for
December 2008 delivery <0#JAU:> on the Tokyo Commodity Exchange
(TOCOM) ended 26 yen per gram higher at 3,074 yen in a technical
rebound after falling by the daily 120 yen limit on Wednesday.
U.S. gold futures rebounded, with the most active February
contract <GCG8> up $7 an ounce at $889.
In industry news, Highland Gold Mining Ltd <HGM.L> plans to
raise gold output by at least 10 percent this year and is on
track to hit 200,000 ounces of production by 2009, managing
director Henry Horne said. []
Silver <XAG=> rose to $16.03/16.08 an ounce, supported by
news that BHP Billiton Ltd/Plc <BHP.AX> <BLT.L> had stopped
operations at its Cannington silver mine in Australia after a
fatality earlier in the day. []
Platinum <XPT=> slipped to $1,555.50/1,560.50 from
$1,559/1,564 an ounce in New York, while palladium <XPD=> was
down $2.50 at $368.50/373.50 an ounce.
(Additional reporting by Daniel Magnowski in London)
(Reporting by Atul Prakash; editing by Chris Johnson)
