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Gold remained little changed in the early European session as investors remained cautious ahead of Fed Chairman Ben Bernankes testimony to Congress on Wednesday.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at $1 284.95 per troy ounce, up 0.11% on the day. Prices held in range between daily high and low of $1 286.55 and $1 275.95. The precious metal settled lower in the past two days, but is still marking a minor weekly advance of 0.09% so far, limited by concern that further gains may curb physical purchases.

Gold surged more than 5% last week, the biggest weekly gain since October 2011, as Fed Chairman Ben Bernanke announced that the U.S. economy still needs the accommodative monetary stimulus as while some sectors of the economy have greatly improved, the labor market is still fragile, citing the unchanged Unemployment Rate at 7.6%. Last week, Initial Jobless Claims turned out to have increased against expectations, further dampening concern over a sooner deceleration of Quantitative Easing. Meanwhile, inflation remains stable and well below target, which gives the Federal Reserve more room for easy money supply.

St. Louis Federal Reserve President James Bullard said on July 12 the U.S. central bank shouldn’t taper its monetary easing program until inflation reaches its target. Meanwhile, Philadelphia Fed President Charles Plosser said the same day exactly the opposite. He stated Fed should trim its bond purchasing in September and bring it to an end by the end of the year.

Xiang Nan, an analyst at CITIC Securities Futures Co., said for Bloomberg: “Investors remain sidelined before Bernanke’s testimony this week for clues on the Fed’s stance on monetary stimulus. Price gains are expected to stall around $1,300 as physical buyers stay away.”

This week, Ben Bernanke is due to testify to Congress on Wednesday and Thursday, which should bring further insight into the future of the central bank’s monetary stimulus.

Investors are also looking ahead into this week’s key U.S. economic data, which will provide information about the economy’s recovery pace. Consumer inflation (CPI) and Industrial production are scheduled for release on Tuesday. CPI on annual basis is expected to have risen by 1.6%, up from the preceding periods 1.4% gain. Industrial production should have accelerated by 0.3% in June after remaining unchanged during may. Manufacturing, which makes up 75 percent of the country’s total output, should have increased for a second month.

On Wednesday, Building Permits and Housing starts will provide data about the U.S. construction sector. The Labor Department will release Initial Jobless Claims on Thursday. The number of people who have filed for unemployment payments is expected to have dropped by 20 000 to 340 000 after last week an unexpected surge to 360 000 supported Bernanke’s statement that the U.S. labor market is still fragile.

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