Gold prices dropped on Monday as encouraging words from Fed Chief Ben Bernanke reduced the appeal of a safety investment. The drop was the first in four sessions for the metal.
April gold fell to $922, down $8.10 for the session. Prices hit as low as $915.30 earlier in the day.
The metal had gained more than $40 in the recent three-day rally. For the week, gold closed lower by $1.60. Before the rally, gold had dropped in 10 of 12 sessions since crossing above $1,000 on Feb. 20.
In other news, Fed Chairman Ben Bernanke gave the first televised interview from a current Fed Chairman in 20 years. On 60 Minutes over the weekend, Bernanke reiterated that he sees the U.S. coming out of recession this year.
While he sees the recession ending before 2010, he noted that the unemployment rate would likely continue to climb, moving into double-digits before getting better. However, he pledged that another failure like Lehman Brothers would not be allowed to happen.
On the economic front, a New York Federal Reserve report showed that the general business conditions index fell to a fresh low of negative 38.2 in March from a negative 34.7 in February, with a negative reading indicating contraction in the sector. Economists had expected the index to edge up to a negative 32.0.
Additionally, the Federal Reserve's industrial production report showed that industrial production fell by 1.4 percent in February compared to economists estimate of a 1.3 percent decline. The decrease reflected a steep drop in utilities output amid a swing to above-average temperatures.
The dollar turned higher against the euro after earlier hitting a five-week high of 1.3070. The buck also rebounded off a 10-day low versus the pound.
