Silver again volatile, sheds 1%
By Myra P. Saefong and Simon Kennedy, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures, poised to log a second day of losses, fell with the U.S. dollar finding support Wednesday after Federal Reserve Chairman Ben Bernanke acknowledged slow U.S. economic growth but made no reference to any further stimulus package.
The U.S. dollar index DXY +0.51% is trying to rally, putting pressure on most commodities, said Darin Newsom, senior analyst at Telvent DTN. The gauge, which tracks the performance of the greenback against a basket of other major currencies, was lately at 73.760, up from 73.528 late Tuesday.
Fundamentally, however, nothing is new, Newsom said: “Bernanke’s comments Tuesday regarding the still weak economy should provide gold long-term support.”
Gold for August delivery GC1Q -0.30% , the most active contract, fell $5.20, or 0.3%, to $1,538.80 an ounce on the Comex division of the New York Mercantile Exchange.
Silver for July delivery SI1N -0.99% dropped 36 cents, or 1%, to $36.69 an ounce.
Speaking Tuesday afternoon, Bernanke said that the U.S. economy will improve in the second half of the year but that progress is slow. “Accommodative” monetary policies are still needed, he said, while stopping short of suggesting additional quantitative easing, which could have provided a boost for commodity prices. Read the text of Bernanke's speech.
Bernanke was “fairly cautious on the economic outlook [but] 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.
Other metals tracked gold lower, with July copper HG1N -1.16% down 6 cents at $4.09 a pound. September palladium PA1U -0.25% lost $5.45 to $804.05 an ounce and July platinum PL1N -0.09% traded at $1,825.40, down $5.30.
