* Bernanke offers few pointers on monetary easing
* Dollar rebounds, stocks rally after Fed comments
* India physical traders wait for lower prices
(Updates with comment, refreshes prices)
By Jan Harvey
LONDON, June 7 (Reuters) - Gold slid on Thursday after the
Federal Reserve's top policymaker offered few hints on the
likely course of U.S. monetary policy, thereby boosting the
dollar and offsetting the lift to bullion from a Chinese rate
China's central bank cut benchmark interest rates by 25
basis points in a surprise move to shore up slackening economic
growth, its first rate reduction since the depths of the 2008/09
financial crisis. The dollar fell in response.
Fed chairman Ben Bernanke said the central bank was prepared
to protect the economy from any worsening in the strains on the
financial system right now, but did not say that the bank would
take additional measures to keep monetary policy
Spot gold was up 0.5 percent at $1,625.95 an ounce at
1328 GMT, off an earlier low of $1,612.64 an ounce, while U.S.
gold futures for August delivery were down $6.90 an ounce
Prices have eased a touch this week after posting their
biggest one-day rise in more than three years on Friday after
disappointing U.S. jobs data reignited speculation that the Fed
would unleash another round of monetary easing.
"The market has already reacted to the weaker jobs data, so
that will be in everyone's mind. It will be important for gold
to hold the $1,600 level," HSBC analyst Jim Steel said.
"Gold hasn't been behaving as a safe-haven, it is more
likely to track indications on monetary policy."
The euro surrendered all gains against the dollar after
Bernanke's initial comments, while Treasury prices rose and U.S.
stocks rallied sharply.
"The gold bulls are desperately hoping for further mention
of some form of stimulus (from the Fed)," David Govett of Marex
Spectron said in a note. "If some form of this is put on the
table, then I expect gold will react very positively."
"If however, as I personally believe, the Fed leaves things
as they are for the time being, this will be viewed as negative
and gold will fall."
Indian gold prices fell almost 1 percent from the previous
day's record high as the rupee hit its strongest in two weeks
and global gold prices fell, though physical traders waited for
bigger falls before buying. Scrap flow remained firm.
From a chart perspective, gold is looking better positioned
for further gains after Friday's push higher, analysts who study
past price moves for clues as to the futures direction of trade
said. However, it has not firmly re-established an upward trend.
Kazakhstan's central bank said on Thursday it would increase
the share of gold in its foreign reserves to 15 percent from
about 12 percent, a day after announcing plans to cut its
holdings in the ailing euro by a sixth.
Official sector gold demand has been a big support to the
gold market in recent years, hitting its highest since the mid
1960s in 2011. Asian and emerging market banks have been most
active, with Russia and Mexico among those raising reserves.
Silver was down 1.7 percent at $28.88 an ounce. It
rose more than 3 percent on Wednesday to its highest since May
8, outperforming gold.
"The gold:silver ratio dropped sharply to 55.07 yesterday,
after touching 57.36 - the highest level since October 2010 - on
Monday," said UBS in a note.
"Silver's rally yesterday was even more impressive
considering that our client flows were dominated by weighty
sellers, although this does not come as a big surprise as an
'overreaction' in silver."
Spot platinum fell 0.6 percent to $1,447.24 an ounce,
while spot palladium was down 0.3 percent at $621.47 an
Holdings of palladium-backed exchange-traded funds tracked
by Reuters rose 1.5 percent or 27,225 ounces by
close of business on Monday, their biggest one-day rise in
absolute terms since Feb. 2. The inflow went into Zurich
Cantonalbank's palladium fund.
(Reporting by Jan Harvey; Editing by William Hardy)
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