* Dollar at three-year low after Bernanke press conference
* Gold hits new high for eighth time in nine sessions
* India shows strong appetite for physical silver
(Recasts, updates prices, market activity)
By David Sheppard
NEW YORK, April 27 (Reuters) - Gold rose to a record high
of almost $1,530 an ounce on Wednesday and silver jumped 6
percent after the Chairman of the Federal Reserve gave no signs
that the central bank would tighten monetary policy, leading
the dollar to a three-year low.
It was the eighth record high in nine trading sessions for
the gold, extending a rally that has seen the precious metal
<XAU=> rise by more than $50 an ounce since April 15 and by
more than $200 since the end of January.
Spot gold <XAU=> rose more than 1.5 percent to touch a
record $1,529.90 an ounce after the Fed said it would end its
$600 billion bond buying stimulus program in June as planned,
and Chairman Ben Bernanke said he was in no rush to raise to
raise short-term interest rates. Lower interest rates tend to
fuel commodity prices, driving investors into riskier assets
and pushing up prices.
"There was a contingent out there that believed there might
be a hawkish expression in the statement and we didn't see that
and I think gold moved up on that," said Bart Melek, director
of commodities with TD Bank Financial Group.
Spot gold was last up 1.3 percent at $1,526.91 an ounce by
4:17 p.m. EDT (2017 GMT), easing slightly from the earlier
record. U.S. futures <GCM1> for June delivery were last up 1.6
percent at $1,526.90 in after-hours trade, having also touched
a record of $1,530.70 an ounce. The official settlement for
Wednesday was $1,517.10 an ounce, up $13.60.
James Steel, metals analyst and Senior Vice President at
HSBC in New York said the Fed's post-meeting statement had "put
the nail in the coffin" of the idea that the Fed could tighten
monetary policy faster than the market had previously thought.
"There will be no speed about reversing policy. Their
accommodative policy has been ascribed in part to concerns
about higher inflation and also have pumped up commodity demand
abroad," Steel said. "Both of those things are good for gold."
Bernanke, speaking at the central bank's first
post-decision news conference, said he expected a relatively
weak number for U.S. GDP in the first quarter, and it would be
at least two more meetings before the Fed considered raising
rates.
The dollar fell to a three-year low against a basket of
currencies <.DXY> as Bernanke was speaking. The euro rose
versus the dollar to almost $1.49, the highest level since
December 2009.
Credit Suisse analyst Tom Kendall said the weak dollar and
other drivers for the gold price remained in place.
"It is the dollar, it is sovereign debt, whether that is
the U.S. or the periphery of Europe. It is headline rates of
inflation in emerging markets and developed markets and it is a
bit of geopolitical uncertainty."
Spot silver <XAG=> jumped by as much as 6 percent to an
intraday high of $48.24 an ounce but was still below the
33-year peak of $49.31 hit on Monday. It remains on track for a
25-percent gain this month and a near 50-percent rise this
year, which would make it the top performing precious metal and
commodity of 2011.
Spot silver was up 5.5 percent at $47.98 an ounce, while
U.S. silver <SIK1> was last up 6.4 percent -- posting its
largest percentage gain this year -- at $47.95 in after-hours
trade. The official settlement earlier was $45.9580 an ounce,
up 90.80 cents.
Implied volatility in silver options has been at its
highest this week since November last year as the spot price
has swung from lows around $43 to highs above $49 in the space
of a week.
"The recent sharp increase in volatility is an indication
of the increasing nervousness of market players and could be a
sign that the rally in the silver price is approaching an end,"
said Commerzbank in a note.
Platinum <XPT=> was last up 1.5 percent at $1,827.50 an
ounce, while palladium <XPD=> was up 2 percent at $768.00.
(Additional reporting by Carole Vaporean in New York, Amanda
Cooper in London and Rujun Shen in Singapore; editing by
Marguerita Choy)
