* Bernanke says Fed stimulus benefits clear, risks small
* Gold posts biggest one-day gain since November 2012
* Market ignores Goldman's cutting gold price forecasts
* Coming up: U.S. durable goods, pending home sales Wed
(Adds market details, updates comment, market activity)
By Frank Tang
NEW YORK, Feb 26 (Reuters) - Gold rose 1.3 percent on
Tuesday, its biggest one-day gain in three months, as Federal
Reserve Chairman Ben Bernanke's defense of U.S. bond-buying
stimulus boosted bullion's inflation-hedge appeal.
The metal broke above $1,600 an ounce, extending its rally
to a fourth straight day, after Bernanke said Fed policymakers
are cognizant of potential risks from its loose monetary policy,
but the risks did not seem material now.
Recent comments by top Fed officials suggesting the U.S.
central bank could reduce or halt its asset buying had heavily
pressured gold prices. A solid performance by U.S. equities
driven by economic optimism had also prompted bullion selling.
Gold tumbled to a seven-month low on Thursday but has since
rebounded 3.5 percent in the last four sessions.
"In the near term, this selloff may provide some
opportunities given Bernanke's comment about the continuation of
stimulus," said Robert Haworth, senior investment strategist at
U.S. Bank Wealth Management.
Spot gold gained 1.3 percent to $1,615.16 an ounce by
2:54 p.m. EST (1954 GMT), its biggest one-day rise since Nov.
23, 2012. It had earlier reached a one-week high of $1,619.66.
U.S. gold futures for April delivery settled up
$28.90 at $1,615.50 an ounce, with trading volume around 45
percent above its 250-day average, preliminary Reuters data
showed.
On Monday, gold had rallied as a sharp pullback in U.S.
equities and uncertainty over the outcome of Italy's
parliamentary election led to safe-haven buying.
In his testimony on the central bank's semiannual report on
monetary policy, Bernanke said the Fed has all the tools it
needs to retreat from its monetary support in a timely fashion.
"We do not see the potential costs of the increased
risk-taking in some financial markets as outweighing the
benefits of promoting a stronger economic recovery and more
rapid job creation," Bernanke told the Senate Banking Committee.
Money printing by global policymakers to weaken their
currencies and a pick-up in central-bank bullion buying should
underpin gold prices, said Rob Lutts, chief investment officer
of Cabot Money Management, which oversees about $500 million in
client assets.
GOLDMAN CUTS GOLD FORECAST
The market largely ignored a cut of more than $200 in the
gold price outlook by Goldman Sachs, one of the top
global bullion banks.
It reduced its 2013 gold price forecast to $1,600 an ounce
from $1,810, citing bullion's recent price drop and an increase
in U.S. real interest rates.
If that projection proves accurate, it will mark the first
year gold has recorded a lower average price year-on-year since
2001, when its record-breaking 12-year bull run began.
Investment interest in the metal stayed weak. The world's
largest gold-backed exchange-traded fund, SPDR Gold Trust,
reported its fourth successive daily outflow on Monday.
Among other precious metals, silver rose 1.1 percent
to $29.34 per ounce. Platinum was up 0.9 percent at
$1,618.74, while palladium climbed 1.3 percent to $742.72
per ounce.
2:54 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold APR 1615.50 28.90 1.8 1583.70 1619.70 238,130
US Silver MAR 29.26 0.273 0.9 28.550 29.430 67,617
US Plat APR 1616.50 -4.20 -0.3 1581.00 1626.70 15,886
US Pall MAR 739.40 -9.65 -1.3 729.10 746.60 6,902
Gold 1615.16 21.30 1.3 1584.98 1619.66
Silver 29.340 0.330 1.1 28.630 29.450
Platinum 1618.74 14.24 0.9 1584.50 1621.00
Palladium 742.72 9.50 1.3 731.50 743.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 252,452 196,536 175,151 16.02 0.24
US Silver 125,244 58,538 53,542 24.4 0.11
US Platinum 16,364 13,878 11,300 19.45 0.03
US Palladium 16,031 7,564 4,958
(Additional reporting by Jan Harvey and Clara Denina in London;
Editing by Bob Burgdorfer and Dale Hudson)
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