Gold, silver slump on Bernanke's comments
Prices slip after the Federal Reserve chairman hints of no further stimulus.
By Alix Steel, TheStreet
Updated at 3:43 p.m. ET
Gold (-GC) for August delivery settled down $5.30 at $1,538.70 at the Comex division of the New York Mercantile Exchange. Gold traded as high as $1,547.40 and as low as $1,531.80, while the spot gold price was shedding $8.50, according to Kitco's gold index.
Silver (-SI) prices slipped 43 cents to finish at $36.63 an ounce. The U.S. dollar index was adding 0.5% at $73.93.
Bernanke appeared to take off the table the prospect of more stimulus, or a third round of quantitative easing, when he spoke Tuesday at the International Monetary Conference in Atlanta. Bernanke acknowledged that slower economic growth is painful but said the recovery could pick up steam in the second half of the year.
Bernanke gave no hints of tightening but said that "accommodative monetary policies are still needed. . . . Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established."
Bernanke's speech was a mixed bag for gold prices. On one hand, the promise of low rates for an extended period means inflation should continue to outpace interest rates. On the other, a lack of additional stimulus helps the U.S. dollar, curbing inflation worries and demand for gold as a haven asset.
Mark O'Byrne, the executive director of Goldcore, a bullion dealer, sees more consolidation for gold and silver prices but believes "some form of QE3 looks likely, but at the same time Ben Bernanke has to be very careful of how he manages perceptions."
Tony Battista, the managing director of TastyTrade, argues that gold really isn't the haven play investors are used to. "If I had to pick one of the two, although gold is higher, . . . I would rather be short gold and long silver," Battista says. "Silver has been beaten up so much more than gold." Battista thinks gold could rise as high as $1,600 but risks falling as low as $1,400, which he sees as fair value.
Mihir Dange, a trader at Arbitrage, is shorting gold from this level until $1,577, gold's intraday record. But said he would start buying again "if we get above $1,577."
Gold mining stocks were trading lower Wednesday. Barrick Gold (ABX) was sinking 2.8% to $44.08, while Newmont Mining (NEM) was losing 1.6% at $52.11. Goldcorp (GG) was down 2.3% at $46.90, and AngloGold Ashanti (AU) was falling 2.1% to $42.94.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
LATEST MARKET DISPATCHES
- No more Dispatches; here's where to find market news
The Market Dispatches column has been discontinued. Here's where to find the latest stock and business news on MSN Money, and the latest from market writer Charley Blaine.
- Dow falls 59 as late-day gloom kills a rally
- Stocks held back by fiscal-cliff worries
- Stocks suffer worst weekly loss in 5 months
- Dow off 121 as post-election swoon continues
- Dow slumps 313 after Obama's re-election
- Dow jumps 133 as Americans head to the polls
Try as the bears might, they couldn't break US stocks. But investors still face frothy prices and considerable headwinds.