PRECIOUS-Gold rises 1.4 pct as Fed stimulus extension hopes
* Gold rises for 4th session, up over 5 pct this week
* Bernanke re-affirms easy policy stance
* One-month GOFO remains in negative territory, tightness seen
* Coming up: U.S. producer price index Friday
(New throughout, updates prices, analyst comment, adds NEW YORK dateline, second byline, table) NEW YORK/LONDON, July 11 (Reuters) - Gold rose 1.3 percent to a near three-week high on Thursday, within striking distance to $1,300 an ounce, as investors flocked to the bullion market as a hedge after U.S. Federal Reserve Chairman Ben Bernanke reasserted that monetary stimulus will stay for some time. Bullion extended its winning streak to a fourth straight day after Bernanke on Wednesday told an economic conference in Cambridge, Massachusetts that a "highly accommodative policy is needed for the foreseeable future." Bernanke's comment, which sparked a Wall Street rally and losses in the dollar, came after minutes of the Fed's June meeting showed many officials wanted more reassurance the job market was on solid ground before withdrawing economic stimulus. "Investors prefer to focus on the probability that the Fed will remain easier for far longer," said Edward Meir, metals analyst at INTL FCStone. Prior to Wednesday, economists had expected the U.S. central bank might begin to scale back its $85 billion in monthly bond purchases in September. Spot gold climbed as much as 2.7 percent to $1,298.36, its highest since June 24. It was last traded up 1.4 percent to $1,281.40 an ounce by 2:00 p.m. EDT (1800 GMT). U.S. Comex gold futures settled up $32.50 at $1,279.90, with trading volume at 225,000 lots, above 10 percent above its 30-day average, preliminary Reuters data showed. Gold is still down 23 percent this year after taking a beating following Bernanke's comments in May and June that the Fed could begin scaling down its bond purchases later this year. Copper jumped about 3 percent to a near one-month highs, while U.S. crude futures retreated after the previous day's rally but hovered near multi-month highs.
PHYSICAL SUPPLY TIGHTNESS The cost of borrowing gold stayed near its highest level since January 2009, reflecting dwindling supplies from bullion banks after heavy liquidation and resilient demand for physical gold products. On Tuesday, the Gold Forward Offered Rates (GOFO), rates at which bullion banks are prepared to lend gold on a swap against U.S. dollars, remained in the negative territory at -0.05 percent, suggesting possible near-term supply tightness. However, investor sentiment remained guarded. Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.1 percent to 30.192 million ounces on Wednesday, hitting fresh lows since February 2009.
Gold's strength also pushed silver to a three-week high of $20.26 an ounce. It was last up 3.6 percent at $20.02. Platinum rose 2.3 percent to $1,403.24, while palladium edged up 0.3 percent to 714.97 an ounce, respectively.
2:00 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold AUG 1279.90 32.50 2.6 1262.10 1297.20 188,626 US Silver SEP 19.956 0.791 4.1 19.430 20.250 48,390 US Plat OCT 1407.60 39.50 2.9 1376.20 1413.50 9,604 US Pall SEP 718.20 4.40 0.6 715.20 731.85 3,870 Gold 1281.40 17.76 1.4 1264.41 1298.36 Silver 20.020 0.690 3.6 19.430 20.260 Platinum 1403.24 31.24 2.3 1381.00 1409.50 Palladium 714.97 2.47 0.3 718.02 728.50 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 225,681 198,136 182,100 23.97 -1.21 US Silver 53,493 66,706 56,312 33.08 -1.04 US Platinum 9,900 16,566 13,039 26.16 -1.57 US Palladium 3,888 4,512 5,526
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Marguerita Choy)