Gold falls on speculation that Ben Bernanke will refrain from stimulus

LONDON: Gold today declined on speculation that Federal Reserve Chairman Ben S Bernanke won't commit the central bank to further stimulus in a speech this week even as investment holdings expanded to a record.

The precious metal fell by $ 2.70, 0.16 per cent to $ 1,660.90 an ounce. The price had reached $ 1,676.90 yesterday, the highest since April 13, amid expectations of further easing from the Fed.

Bernanke probably won't use the August 31 speech at the Fed's annual symposium in Jackson Hole, Wyoming, to suggest a third round of bond buying is imminent, according to JPMorgan Chase and High Frequency Economics.

Members of the Federal Open Market Committee are monitoring unemployment and other US data, and have been divided about whether to spur expansion.

Holdings in gold-backed exchange-traded products rose to 2,451.63 tonnes. The ETP holdings stand at the equivalent of 78.82 million ounces, compared to Italy's 78.83 million ounces, according to International Monetary Fund data.