SINGAPORE, May 23 - Gold fell for a third straight session on Thursday after U.S. Federal Reserve Chairman Ben Bernanke hinted at reducing an $85 billion bond-buying programme that has increased the metal's appeal as a hedge against inflation.

    

FUNDAMENTALS

* Spot gold dropped 0.3 percent to $1,363.96 an ounce by 0018 GMT, holding near a two-year low of $1,321.35 reached in April.

    

* The metal hit a one-week high of $1,414.25 on Wednesday  after Bernanke told Congress that the U.S. economy needs further traction before it scales back monetary stimulus. But the price slipped after he said a decision to cut back may come at one of the central bank's "next few meetings" if the economy looked set to maintain momentum. 

    

* U.S. gold futures also fell 0.3 percent to $1.362.90 an ounce. 

    

* Premiums for gold bars hit a record high in Asia on Wednesday as lower spot prices lured more buyers, mainly in China, the world's second biggest consumer of the precious metal, amid tight physical supplies. 

    

* Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.3 percent to 1,020.07 tonnes on Wednesday, the lowest in more than four years.

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* Spot silver rose slightly after a two-day fall, while platinum and palladium tracked gold lower.

        

MARKET NEWS

* The dollar hovered at a near three-year high against a basket of major currencies in Asia, having risen broadly as Treasury yields jumped on the prospect that the Fed might scale back its stimulus programme this year. 

   

    DATA/EVENTS (GMT) 

    0145   China HSBC Manufacturing Flash PMI       

    0658   France Markit Manufacturing Flash PMI    

    0728   Germany Markit Manufacturing Flash PMI   

    0758   Euro zone Markit Manufacturing Flash PMI 

    1230   U.S. Weekly jobless claims              

    1258   U.S. Markit Manufacturing Flash PMI     

    1400   U.S. New home sales                     

    1400   Euro zone Consumer confidence           

    N/A    European Central Bank chief Mario Draghi speaks

    

  Precious metals prices 0018 GMT

  Metal             Last    Change  Pct chg  YTD pct chg    Volume

  Spot Gold        1363.96   -4.58   -0.33    -18.55

  Spot Silver        22.24    0.05   +0.23    -26.55

  Spot Platinum    1463.99   -1.51   -0.10     -4.63

  Spot Palladium    742.97   -1.03   -0.14      7.37

  COMEX GOLD JUN3  1362.90   -4.50   -0.33    -18.67       4378

  COMEX SILVER JUL3  22.23   -0.25   -1.10    -26.48        778

  Euro/Dollar       1.2829

  Dollar/Yen        103.40

 

  COMEX gold and silver contracts show the most active months