Gold Futures Drops ahead of Bernanke Speech
Gold futures declined on Wednesday mainly in reaction to stronger greenback while investors were also mixed over the decision of central bankers ahead of Bernanke speech. Gold futures contract for December delivery plunged 0.4 percent or %6.70 to settle at $1,663 per ounce on the Comex division of the New York Mercantile Exchange.
US Federal Reserve’s Chairman Ben Bernanke is to deliver his speech on Friday in Jackson Hole Conference which will be closely watched by investors to get any hints of further quantitative easing measures by the central bank. Investors also await for any hints regarding the size and timing of Fed’s asset purchase program. Gold also benefits on the news or expectations of further monetary stimulus measures as the precious metal is a very preferred alternative to devalued currencies for investors.
The stronger dollar also exerted pressure on gold as the dollar index DXY which tracks greenback’s performance against its major rivals surged to 81.554 on Wednesday as compared to 81.334 on Tuesday’s North American trading session.
Gold is a major dollar dominated commodity and always moves in opposite direction of the greenback as in case of higher US dollar it gets expensive for investors holding foreign currencies.
Among other metals, silver futures contract for September delivery declined 0.1 percent or $0.04 to settle at $30.84 per ounce while copper futures contract for same month delivery dropped 0.6 percent or $0.02 to settle at $3.44 per pound.
Platinum futures contract for October delivery slipped 0.1 percent or $0.01 to settle at $1,520.30 per ounce while palladium futures for September delivery plunged 0.8 percent or $4.85 to settle at $634.;85 per ounce.