(RTTNews) - Gold closed slightly lower as traders pondered the latest government moves in the battle to combat the credit crisis. Gold for December delivery ended at $839.00, down 50 cents on the session. Prices hit as high as $852.20 and as low as $833.10 on a volatile day of trading.
The precious metal has been closed lower in each of the last five sessions after hitting a 2 1/2-month high last week. Gold has lost almost $70 an ounce in the slump.
The precious metal dropped Wednesday as the U.S. dollar turned higher for the day against the euro, pushing gold's hedge appeal lower. The greenback also recovered early losses in trading with the British pound.
Gold's hedge value was further reduced as crude oil prices continued to tumble. Oil for November delivery fell to a yearly low of $74.97 as traders showed concern the credit crunch will adversely impact energy demand.
Trading took place as Federal Reserve Chairman Ben Bernanke warned Wednesday that it will take "some time" to unfreeze the credit markets. He also noted that even after credit markets return to normal, the economy is not likely to return to its potential growth right away.
In a speech before the Economic Club of New York, Bernanke attempted to soothe fears, explaining that despite the "large and complex" problems in the economy, the U.S. is well positioned to move forward. However, he warned that economic activity will be muted for a while.
A Department of Labor report showed that the producer price index fell by 0.4 percent in September following an unrevised 0.9 percent decrease in August. The continued decrease in prices matched the consensus estimate of economists.
A Department of Commerce report showed that retail sales fell by 1.2 percent in September following a revised 0.4 percent decrease in August. Economists had expected a more modest decrease in sales of about 0.7 percent compared to the 0.3 percent decrease originally reported for the previous month.
Meanwhile, a Federal Reserve Bank of New York showed that the general business conditions index fell to a record low of negative 24.6 in October from a negative 7.4 in September, with a negative reading indicating a contraction in the sector. Economists had expected the index to come in at a negative 10.0.
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