Gold steady after bounce, Bernanke speech eyed

Spot gold steadied on Friday after rebounding in the previous session, as investors awaited a speech by US Federal Reserve Chairman Ben Bernanke later in the day.

All eyes are on Bernanke's speech in Jackson Hole scheduled for 1400 GMT, with markets eager to hear what the Fed's plan is to help a struggling U.S,. economy, although the growing consensus is that the Fed's options to stimulate the economy are limited.

Spot gold edged down 0.3% to USD 1,763.71 by 0102 GMT. It was on course for a 4.7% decline on the week, its sharpest weekly fall since week ended March 1, 2009.

US gold inched up 0.2% to USD 1,766.90.

Disappointment in Jackson Hole could spur another safe-haven rally for assets like gold which has just lost more than USD 100 from Tuesday's record high of UISD 1,911.46.

But persistent worries over the euro zone debt crisis should buoy gold. Germany's DAX dropped as much as 4% on rumours the country could enact a short-selling ban following the example of other European nations. A German Finance Ministry spokesman told Reuters they were not planning a general short-selling ban.

Holdings in the SPDR Gold Trust remained unchanged at 1,232.314 tonne, while holdings in the iShares Silver Trust dropped more than 1% to 9,705.90 tonne.

Spot silver lost 0.9% to USD 40.64 an ounce, but still up from a 1-1/2 week low of USD 38.73 hit in the previous session.