NEW YORK (TheStreet ) -- Gold prices were choppy Wednesday as investors stayed cautious during earnings season and awaited Federal Reserve Chairman Ben Bernanke's testimony to Congress.
Gold for August delivery was rising $4.50 to $1,196.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Wednesday has traded as high as $1,198 and as low as $1,187.70. The U.S. dollar index was rising 0.21% to $82.96 while the euro was slipping 0.58% to $1.28 vs. the dollar. The spot gold price Wednesday was adding more than $1, according to Kitco's gold index.
Risk appetite was improving slightly Wednesday as investors cheered another blowout quarter from Apple(AAPL), but the mood was still cautious as traders also had to digest uncharacteristically weak revenue from Goldman Sachs(GS). Gold prices were also victims of the same investment uncertainty.
Gold managed to rally almost $10 on Tuesday as bargain-hunters bought gold below $1,200 an ounce as investors sought the safety of gold. Investors Wednesday are tentatively interested in both stocks and gold as they try to hedge against risk and participate in any equity market rally.
Gold prices will look for direction Wednesday from Bernanke and his two-day testimony to Congress over the health of the economy. Bernanke will be discussing the semiannual monetary policy report before the Senate Committee on Banking, Housing and Urban Affairs.
There is speculation that the Fed will ease monetary policy even further to ignite growth in the U.S. like buying mortgage-backed securities or more government debt. Bernanke is expected to downplay the threat of a double-dip recession but to curb his optimism in a quick recovery. Any sign of more spending or free money or money printing from the Fed will give a boost to gold as investors turn to gold on anticipated U.S. dollar weakness.
Over the short term, gold's correction could last a bit longer. The popular gold exchange-traded fund, SPDR Gold Trust(GLD), lost 6.09 tons on Tuesday as some traders rotated out of their gold positions.
"I think people are perhaps repositioning themselves," says Adrian Ash, head of research for the BullionVault.com. "Looking to take trades off the table for the summer ... I think there is a lot of professional money that would quite like to stay on the beaches and not have to worry about positions they have open."
