Gold Off Slightly Ahead Of Bernanke Speech

By Jerry A. DiColo

NEW YORK (Dow Jones)--Gold futures were down slightly Tuesday, as investors pause ahead of a speech expected later in the day by Federal Reserve Chairman Ben Bernanke.

Gold held below the key $1,550 a troy ounce level, and trading is expected to remain subdued before Bernanke's speech at the International Monetary Conference at 3:45 p.m., EDT, in Atlanta.

Statements from the Fed chairman are taking on renewed importance after a string of weak economic data last week raised fears about a slowdown in the U.S. recovery. The central bank's latest stimulus program, known as quantitative easing two, or QE2, is set to wind down this month, and investors are concerned about how the economy will fare without the Fed's help.

The slowdown is leading to calls for a third round of stimulus, but few economists expect the Fed to take that action.

"The economy, without question, is hitting a really big soft patch," said Matt Zeman, head of trading at Kingsview Financial. "A lot of commodities are just waiting to get their next cue, and they'll be waiting on Bernanke's comments later today. ... If (central bankers) continue to pump more money, it's going to be gold positive and dollar negative."

Gold, a hedge against economic uncertainty, has drifted higher in recent days amid demand for a safe harbor.

Investor confidence suffered a massive blow last week, as poor economic data from the U.S. culminated in a weaker-than-expected jobs report Friday. The surprise slowdown in employment has led to questions about the future of the U.S. economic recovery.

Gold reached new all-time highs in early May, and have again climbed toward record levels. Europe's churning sovereign-debt troubles have renewed concerns about holding paper currencies like the euro or the dollar as investors remain concerned about financial stability in the region.

Silver rose 1.2% to $37.230 a troy ounce.

Nymex palladium for September delivery, the most actively traded contract, rose $9.70, or 1.2%, to $808.40 a troy ounce.

Platinum for July delivery, the most actively traded contract, gained 0.4% to $1,827.90 a troy ounce.

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