MW:Gold, silver futures slip after Bernanke speech
By Simon Kennedy, MarketWatch
LONDON (MarketWatch) — Gold and silver futures slipped Wednesday as the dollar edged higher after Federal Reserve Chairman Ben Bernanke acknowledged slowing U.S. growth, but made no reference to any further stimulus package.
Speaking Tuesday afternoon, Bernanke said the U.S. economy will improve in the second half of the year, but that progress is slow. He added that “accommodative” monetary policies are still needed, but stopped short of suggesting more quantitative easing, which could have provided a boost for commodity prices.
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Gold for August delivery GC1Q -0.64% , the most active contract, fell $5.20, or 0.3%, to $1,538.70 an ounce in European trading.
Silver for July delivery SI1N -2.38% dropped 54 cents, or 1.5%, to $36.51 an ounce.
The dollar index DXY +0.31% , which tracks the performance of the greenback against a basket of other major currencies, edged up 0.2% to 73.671.
“After the recent run of soft data, some were desperate for Fed Chairman Bernanke to drop hints about further quantitative easing when he spoke yesterday. As it was, whilst he was fairly cautious on the economic outlook, he didn’t throw out any bones for commodity, foreign exchange or equity markets to latch onto,” said Simon Smith, chief economist at FxPro.
“Bernanke is all too aware of the self-fulfilling momentum that could build around expectations for further QE and at this point in time, he does not want to light the touch-paper,” he added.
The fall for metals futures came as oil prices also slipped below $99 a barrel amid speculation that the Organization of the Petroleum Exporting Countries will raise output quotas at a meeting in Europe on Wednesday. Read more on falling oil prices and OPEC's plans.
Simon Kennedy is the City correspondent for MarketWatch in London
