UPDATE 5-Gold lifted by oil, stays stuck in range


(Updates to midafternoon in New York)

By Daniel Magnowski

LONDON, Aug 25 (Reuters) - Gold firmed with energy prices on Friday but remained comfortably in its recent range after a widely awaited speech by U.S. Federal Reserve chairman Ben Bernanke failed to jolt financial markets, analysts said.

Traders had expected Bernanke to offer some fresh clues about likely direction of U.S. interest rates in his speech at Jackson Hole, Wyoming, but he chose not to comment on rates.

Dealers had said that any suggestion the Fed's two-year credit-tightening cycle had come to an end might spur selling in the dollar. A weaker dollar makes dollar-priced gold more attractive to buy for holders of other currencies.

"Gold moved out of its range overnight, then quickly moved back into it," a London trader said after the Fed chairman's remarks.

"The market is very comfortable with $624 (per ounce) as a pivot point."

Business was quiet and volumes thin on the last trading day before a three-day weekend in Britain, he said.

Spot gold was quoted at $621.50/623.00 per ounce late in New York, up very slightly from $620.30/621.05 on Thursday.


In the absence of fresh news, conflicting forces are cancelling each other out and leaving gold stuck in a range.

Gold is supported by high oil prices and the threat of a hurricane hitting the U.S. Gulf, and at the same time dragged down by U.S housing data that indicate the risk of inflation is decreasing, said Peter Fertig, director of FX and commodity strategy at Dresdner Kleinwort, in a note.

Gold is often bought as hedge against inflation.

"This market continues to go nowhere in a hurry as the contracting range of the last month grinds on. After such prolonged inactivity we are not expecting the price to explode into life again until the vacation season has ended," said technical analysts at Barclays Capital.

The dollar was steady against the euro at $1.2755 in the afternoon.

Silver seemed to be losing some strength after rising as far as $12.59 an ounce on Thursday. Spot silver was quoted at $12.33/12.43 an ounce, up 6.0 cents from Thursday.

Silver, mainly used in jewellery, photography and electronics, rose to its highest since May 31 at $12.66 an ounce on Wednesday.

In other precious metals, platinum fell to $1,216/1,222 an ounce from $1,227/1,232. Palladium was up $1 at $343/348 an ounce. (additional reporting by Zach Howard in New York and Lewa Pardouman in Singapore)



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