Gold Retreats on Bernanke Comments
By MYRA P. SAEFONG And SARAH TURNER
Gold futures traded lower Wednesday, pressured as comments from Federal Reserve Chairman Ben Bernanke fueled strength in the dollar and as upbeat U.S. economic data dulled safe-haven investment demand for the precious metal.
Metals investors also digested news that the European Central Bank will offer a larger-than-expected amount of loans to the region's banks.
Gold for April delivery fell $11.90, or 0.7%, to $1,776.50 an ounce on the Comex division of the New York Mercantile Exchange.
"Gold is likely down on profit-taking after … nervousness regarding Bernanke's testimony and his suggestion that the Fed will not ease further," said Mark O'Byrne, executive director at GoldCore.
In testimony prepared for the House Financial Services Committee, Mr. Bernanke said that recent improvement in employment has put the Fed on alert and that it is watching incoming data closely. Mr. Bernanke stopped short of saying the improvement in the jobless rate meant a better economy ahead. But if it was enough of a hint of less policy accommodation to send gold futures lower.
The comments also helped strengthen the dollar, which in turn put pressure on dollar-denominated gold. The ICE Dollar Index rose to 78.430, up from 78.206 before Mr. Bernanke's testimony and from 78.222 on Tuesday.
Gold investors also digested the latest upbeat news on the U.S. economy.
Of note, the Commerce Department reported revised growth of 3% for gross domestic product in the fourth quarter, faster than originally reported. Economists surveyed by MarketWatch had predicted GDP growth would be revised down to a 2.7% for the final three months of 2011 from an initial reading of 2.8%.
Other metal futures traded mixed Wednesday.
Silver for March delivery fell 26 cents, or 0.7%, to $36.88 an ounce, while March high-grade copper futures traded up a penny at $3.92 per pound.
Platinum for April delivery were up 50 cents at $1,724 an ounce, with March palladium gaining $3.25, or 0.5%, to $716.50 an ounce.
[A hint of what could happen to gold if the economy goes well and interest rates normalize ...] |
