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Silver 32.17, Gold 1655.10, Climbs On Weak Dollar Ahead Of Bernanke
Mar 21, 2012 By Tatyana Shumsky Of DOW JONES NEWSWIRES

--Comex April gold up 0.5% at $1,654.40/oz
--Greece passes final laws to activate its bailout
--Traders cautious ahead of Bernanke

NEW YORK (Dow Jones)--Gold futures edged up Wednesday morning as the dollar faltered after Greece passed the legislation necessary to activate its bailout, though buyers were cautious ahead of Federal Reserve Chairman Ben Bernanke's testimony later in the morning.

The most actively traded contract, for April delivery, was recently up $7.40, or 0.5%, at $1,654.40 a troy ounce on the Comex division of the New York Mercantile Exchange.

Gold futures pushed higher as the dollar retreated against the euro after Greek parliament formally approved the new EUR130 billion ($172 billion) loan deal. The vote, held early Wednesday, seals a turbulent period of uncertainty about Greece's ability to avoid default and stay in the European Union. However, the country still faces the challenge of implementing austerity measures that were a precondition for the bailout funds by its international creditors.

Dollar-denominated gold futures tends to seem less expensive to buyers using foreign currencies when the greenback weakens.

Gold trading volumes were muted ahead of Bernanke's testimony to Congress.

"The last time Bernanke spoke, the precious metals complex cratered...on perceptions that further easing was ruled out," said Edward Meir, senior commodity analyst with INTL FCStone, in a note. "While we do not expect to have the same reaction this time around, we would not be surprised to see a little more weakness set in over the precious metals group over the days ahead given the deteriorating technicals."

Gold market participants also continue to weigh in the likely impact of India's proposed higher gold import duty on that country's demand for the precious metal. Many gold retailers have shut their shops to protest the higher import and excise taxes, in a move that's expected to stall March gold imports.

"Imports have almost stopped," said Prithviraj Kothari, president of the Bombay Bullion Association. March imports are expected to total only 25 to 30 metric tons, he said.

Gold traders are keeping close watch on these developments as India is the world's largest consumer of the metal.

"Any longer-lasting period of subdued gold demand such as that seen in recent days in India...is likely to hinder any increase in the price of gold," said Commerzbank.

-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; [e-mail]

--Debiprasad Nayak in Mumbai contributed to this article.
(END) Dow Jones Newswires
03-21-12 0942ET

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