(Corrects day of the week in the lead)
* Gold hovers near highest since April on stimulus
speculation
* Sell-off possible if Bernanke disappoints
* Bullion ETFs' holdings rose to record
By Frank Tang
NEW YORK, Aug 28 (Reuters) - Gold rose on Tuesday as weak
U.S. consumer confidence boosted speculation of new stimulus
from the Federal Reserve, but some analysts warned of a possible
sell-off if the U.S. central bank does not commit to more
monetary easing.
Bullion climbed on a weak dollar as investors expected the
Fed may unveil another round of stimulus at the annual symposium
of central bankers and finance ministers in Jackson Hole,
Wyoming. Bernanke is due to deliver a speech on Friday.
Gold investors could quickly unwind bullish positions if
Bernanke does not signal readiness to launch a third round of
government bond buying, or quantitative easing, analysts said.
"Gold prices could correct, possibly abruptly and steeply,
should Bernanke's speech again hint of distancing the Fed from
further monetary policy easing," said James Steel, analyst at
HSBC.
Spot gold was up 0.5 percent on the day at $1,671.56
an ounce by 11:49 a.m. EDT (1549 GMT), hovering near a 4-1/2
month high at $1,676.45 on Monday.
The metal has gained 5 percent in the past nine sessions.
Spot prices have narrowed their gap with futures after a
wave of selling sent spot bullion lower after Monday's futures
settlement.
U.S. COMEX gold futures for December delivery were
down $1.30 an ounce at $1,674.30, and trading volume was on
track to finish below its average, preliminary Reuters data
showed.
Sentiment in the gold market also received a boost after a
report showed the U.S. consumer confidence deteriorated in
August to the lowest in nine months as Americans were more
pessimistic about labor market prospects.
A patchy run of U.S. economic data and comments from Fed
policymakers that the fragility of the recovery may warrant more
easing to keep interest rates low has pushed equities to
four-year highs and lifted gold, a traditional inflation hedge.
Fed policymakers are still weighing options and have not yet
agreed to more stimulus, said Dallas Fed President Richard
Fisher, who opposes more easing.
INVESTORS SOAK UP GOLD
Despite uncertainty in recent weeks, investors have
gradually increased gold ownership. Holdings of gold in
exchange-traded products hit a record 71.53 million ounces on
Friday, driven by a broad-based flow of metal into most of the
major ETPs monitored by Reuters.
Adding to the bullish undertone in the gold market was
concern about supply from South Africa, which has 80 percent of
the world's platinum and also a major gold producer. Tension in
the country's mining industry has run high after deadly violence
at Lonmin's Marikana mine.
Platinum group metals investors took profits after their
recent run-ups. Spot platinum was down 1.1 percent at
$1,519.99 an ounce, while palladium eased 0.5 percent to $642.47
an ounce.
Prices at 11:49 a.m. EDT (1549 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold 1674.30 -1.30 -0.1% 6.9%
US silver 30.860 -0.188 -0.6% 10.5%
US platinum 1524.90 -28.30 -1.8% 8.9%
US palladium 645.30 -9.45 -1.4% -1.7%
Gold 1671.56 7.96 0.5% 6.9%
Silver 30.90 0.21 0.7% 11.6%
Platinum 1519.99 -17.11 -1.1% 9.1%
Palladium 642.47 -3.13 -0.5% -1.5%
Gold Fix 1668.00 4.50 0.3% 5.9%
Silver Fix 30.81 44.00 1.4% 9.3%
Platinum Fix 1521.00 2.00 0.1% 10.1%
Palladium Fix 640.00 3.00 0.5% 0.6%
(Additional reporting by Amanda Cooper and Jan Harvey in
London; Editing by David Gregorio)
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