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PRECIOUS-Gold extends gains as Yellen calms stimulus tapering fears

Wednesday, 13 Nov 2013 | 7:34 PM ET

SINGAPORE, Nov 14 (Reuters) - Gold extended gains into a second session on Thursday after Janet Yellen, likely the next chair of the Federal Reserve, indicated the U.S. central bank would continue to support the economy through its stimulus measures.

FUNDAMENTALS

* Spot gold had risen 0.5 percent to $1,285.00 an ounce by 0022 GMT, after snapping a four-day losing streak on Wednesday by gaining nearly 1 percent. Other precious metals also climbed.

* Prices had fallen sharply since last Thursday after strong U.S. GDP and jobs growth data raised fears that the Fed could begin tapering its stimulus in December.

* U.S. gold advanced as much as 1.4 percent, tracking spot gold's gains.

* Yellen, President Barack Obama's nominee to lead the Fed, said the economy and the labour market were performing "far short" of their potential, while price pressures remained muted. That bolstered expectations the central bank would continue to buy back bonds at an $85-billion monthly pace.

* The stimulus measures have been a key support for gold prices in recent years as they burnish the metal's appeal as a hedge against inflation.

* Kinross Gold Corp said on Wednesday it would make further cuts to its employee numbers and capital spending as the Toronto-based gold miner reported a steep drop in third-quarter earnings hurt by weaker gold prices.

* South Africa's AMCU union has lowered its wage demands at Impala Platinum, bringing it closer to resolving weeks of deadlock that had been threatening a strike at the world's No.2 platinum producer.

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MARKET NEWS

* The dollar was under pressure after Yellens's dovish comments, while U.S. Treasury yields drifted lower.

DATA/EVENTS (GMT) 0630 France preliminary Q3 GDP 0700 Germany preliminary Q3 GDP 0900 Italy preliminary Q3 GDP 1000 Euro zone preliminary Q3 GDP 1330 U.S. weekly jobless claims 1330 U.S. International trade 1500 U.S. Senate banking committee holds hearing on nomination of Janet Yellen for Fed chair

PRICES AT 0022 GMT

Metal Last Change Pct chg YTD pct chg Spot gold 1285 6.39 0.5 -23.26 Spot silver 20.72 0.14 0.68 -31.57 Spot platinum 1434.9 4.16 0.29 -6.52 Spot palladium 732.72 2.75 0.38 5.88 Comex gold Dec3 1284.7 16.3 1.29 -23.34 Comex silver Dec3 20.7 0.258 1.26 -31.71 Euro 1.3487 DXY 80.774

COMEX gold and silver contracts show the most active months

(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)