Gold prices supported by hopes of physical demand, Bernanke effect

?Gold is an unusual asset. It?s an asset that people hold as a sort of disaster insurance,? Bernanke said.

MUMBAI : With markets deciphering the Ben Bernanke testimony to the effect that Fed may not taper soon, (bond purchases ?are by no means on a preset course?), the futures of gold advanced for a second day. Hopes galore that physical demand would support price of the commodity.

Gold on the Comex for delivery on August 13 was seen trading at $1,290.25/oz, a gain of $6.05 or 0.47% as of 10.12 AM IST. Gold on India's MCX for August delivery was seen trading at Rs26760/ 10 grams, a gain of 0.4% as of 10.13 AM IST.

?Physical buying is not bad for this time of the year but may not be enough to counter ETF liquidations,? said Huang Fulong, an analyst at CITICS Futures Co. to Bloomberg.

?Gold continues to trade in range, supported this week by Bernanke?s remarks which made investors question tapering expectations,? he added. Spot gold prices in Singapore too advanced.

'I don't understand gold prices'

?Nobody understands gold prices and I don?t really pretend to understand them either.? Bernanke had been excessively frank as he testified before the US Senate Banking Committee on Thursday.