PRECIOUS-Gold stuck in tight range before Fed speech

* Gold faces support at $1,656 - technicals 
    * Coming Up: U.S. personal income/spending for July; 1230
GMT

 (Updates prices, adds quotes)
    By Lewa Pardomuan
    SINGAPORE, Aug 30 (Reuters) - Gold was trapped in a tight
range on Thursday ahead of a speech from Federal Reserve
Chairman Ben Bernanke on Friday that could stoke expectations
for a third round of quantitative easing to stimulate the U.S.
economy. 
    But gold is also vulnerable to a selloff if the address
turns out to be a disappointment after the U.S. economy fared
slightly better than initially thought in the second quarter and
the Fed Beige Book report showed the economy continued to grow
gradually in July and early August.
  
    Gold was little changed at $1,656.44 per ounce by
0228 GMT -- not far from a 4-1/2 month high of $1,676.45 hit on
Monday, when investors bought the metal on expectations of
further monetary easing from the Fed.  
    "Sentiment is a bit mixed. People are pretty cautious," said
Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. 
    "It looks like central banks are buying at the lower end.
The market doesn't seem to move around too much," said Leung,
who quoted premiums for gold bars unchanged from last week at 80
cents to $1.
    
    In other markets, shares eased and major currencies remained
rangebound as investors avoided betting on direction before a
speech by Ben Bernanke, with the focus on whether there will be
any hints about further U.S. stimulus. 
   Bernanke will likely keep markets guessing about the timing
of another round of bond purchases when he speaks on Friday in
Jackson Hole, but he is also likely to sustain expectations for
action of some kind next month. 
    Previous rounds of asset purchases by the Fed to drive down
interest rates and stimulate the economy had weakened the U.S.
dollar, boosted global stock markets and prompted investors to
turn to gold as a hedge against inflation.
    Last week, gold broke above the upper end of a four-month
trading range to more than $1,640 per ounce after the minutes of
the Fed's latest policy meeting revealed the U.S. central bank
intended to adopt gold-friendly stimulus soon unless economic
conditions improve dramatically.
    "I hope news from the Fed will be positive. But the flow of
gold scraps is starting to slow down a little," said a dealer in
Singapore, adding that the physical market lacked activity ahead
of Bernanke's speech. 
    U.S. gold slipped 0.22 percent to $1,659.30 an
ounce.    
    Holdings of the largest gold-backed exchange-traded-fund
(ETF), New York's SPDR Gold Trust GLD, and that of the
silver-backed ETF, New York's iShares Silver Trust SLV, remained
unchanged on Wednesday from Tuesday. 
        
  Precious metals prices 0228 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1656.44    0.50   +0.03      5.92
  Spot Silver        30.65   -0.03   -0.10     10.69
  Spot Platinum    1517.75    7.25   +0.48      8.96
  Spot Palladium    627.70   -0.20   -0.03     -3.80
  COMEX GOLD DEC2  1659.30   -3.70   -0.22      5.90         4857
  COMEX SILVER SEP2  30.64   -0.20   -0.64      9.76         1104
  Euro/Dollar       1.2536
  Dollar/Yen         78.62
 
  COMEX gold and silver contracts show the most active months