By Frank Tang and Jan Harvey
NEW YORK/LONDON (Reuters) - Gold rose to a three-month high on Tuesday, gaining more than 1 percent after incoming Federal Reserve Chair Janet Yellen made it clear she would not make any abrupt changes to the central bank's commitment to a measured tapering of bond purchases.
In her testimony before the U.S. House Financial Services Committee, Yellen said she strongly supports the monetary policy approach driven by her predecessor, Ben Bernanke.
"The overall tone of Yellen's comment is a carbon copy of the Fed's existing policy under Bernanke, so the market is relieved that there will be no tightening any time soon," said Bill O'Neill, partner of New Jersey commodities investment firm LOGIC Advisors.
Spot gold was up 1.3 percent at $1,290.69 an ounce by
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12:42 p.m. EST (1742 GMT), its biggest one-day gain in three weeks. Earlier, it hit $1,293.44 - the highest price since November 14.
U.S. COMEX gold futures for April delivery were up $16.20 an ounce at $1,290.90, with trading volume on track to finish near its 250-day average, preliminary Reuters data showed.
Yellen's testimony comes at a tricky time given two months of soft employment growth and as a deadline looms on raising the U.S. government borrowing limit before a possible debt default.
Speculation that the Fed might hold off further reduction of stimulus had strongly supported gold by keeping interest rates at rock bottom while stoking inflation fears.
In the physical markets, bullion was also underpinned after India's trade ministry said it has recommended easing curbs on gold imports, after a 77 percent drop in imports for January that helped narrow the country's trade deficit.
India had imposed curbs last year including a record 10 percent duty to discourage gold purchases.
Among other precious metals, silver gained 0.9 percent to $20.21 an ounce. Platinum climbed 0.3 percent to $1,385.49 an ounce, while palladium eased 0.1 percent to $714.25 an ounce.
(Additional reporting by Clara Denina in London, A. Ananthalakshmi in Singapore; editing by William Hardy and Meredith Mazzilli)
