NEW YORK (TheStreet) -- Gold prices fell Tuesday after Federal Reserve Chairman Ben Bernanke stayed mum about whether the central bank is prepared to launch another round of quantitative easing.
Gold for August delivery was down $11.50 to $1580.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1598.80 and as low as $1581 an ounce, while the spot price was ticking down $5.10, according to Kitco's gold index.
Bernanke is giving his semi-annual testimony on monetary policy before Congress over the next two days, starting with an appearance before the Senate Banking Committee on Tuesday. His prepared statement acknowledged the soft patch the U.S. economy has hit and gave no hints that QE3 is on the way.
"The U.S. economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year," he said. "After rising at an annual rate of 2-1/2 percent in the second half of 2011, real gross domestic product (GDP) increased at a 2 percent pace in the first quarter of 2012, and available indicators point to a still-smaller gain in the second quarter."
George Gero, precious metals strategist at RBC Wealth Management, wasn't expecting much from Bernanke on the subject of QE3 anyway because of the venue.
"I don't think that this is the platform when he will usually say something that is going to be unusual or dynamic," said Gero."Basically he's testifying, which means he's answering questions."
Silver prices for September delivery were down about 15 cents to $27.01 an ounce, while the U.S. dollar index was up 0.28% to $83.37.
Gero said the market is weak Tuesday because of benign inflation figures and a weaker outlook on Germany.
The gold trade could remain relatively flat through the remainder of the week as the United States, Europe and other players have few major economic indicators slated for release in the short term.
Gero said expects gold to stick in a range of $1575-to-$1600 an ounce for the next week or so.
Open interest has gained about 20,000 contracts in the last few weeks, and a lot of open interest has gone to the December contract, which suggests that investors want to be long gold past the November election.
Traders are watching to see if a trend emerges where gold maintains its level without a concurrent selloff in the U.S. dollar. That might indicate that investors who live in economically troubled areas like Spain, Portugal and Italy are going long on gold and the dollar as the Euro sinks.
Gold mining stocks were weak Tuesday. Eldorado Gold(EGO_) was at $10.44, down 24 cents, or 2.3%, while Agnico-Eagle Mines(AEM_) was at $36.30, down 83 cents, or 2.2%.
Among other mining stocks, Randgold Resources(GOLD_), Newmont Mining(NEM_), Barrick Gold(ABX_) and Yamana Gold(AUY_) were all charging lower by more than 1%.
