Gold slips, tracking higher $ ahead of Bernanke testimony

Gold eased on Wednesday but stayed near a three-week high, as the dollar gained ahead of keenly awaited congressional testimony by US Federal Reserve Chairman Ben Bernanke later in the day.

Bullion prices have traded in a tight range over the last few sessions as investors held back on big bets ahead of the testimony, which they hope will provide a clear outlook regarding the Fed's USD 85-billion monthly bond purchases.

Slowing physical demand also contributed to the market's cautious undertone.

"The trend is unclear, so gold is just following the dollar," said Peter Fung, head of dealing at Hong Kong's Wing Fung Precious Metals.

"We are not sure what to expect from Bernanke as he has made contrasting comments over the last few weeks. Gold is waiting for guidance from him," said Fung.

The Fed's bond purchases have boosted market liquidity, benefiting gold and other commodities. They have also kept the dollar subdued, driving purchases of commodities by holders of other currencies.