Print 
PDF
BookmarkMADRID (MarketWatch) — Gold prices pushed higher on Wednesday after New York Federal Reserve President William Dudley said the economic outlook is still uncertain ahead of Federal Reserve Chairman Ben Bernanke’s testimony before Congress later in the day.
Gold futures for delivery in June GCM3 +0.76% doubled earlier gains to rise $16.40, or 1.2%, to $1,393.70 an ounce, a level that was closer to the top of the day’s trading range. The contract had earlier dropped as low as $1,370.60 an ounce.
The yellow metal had shed $6.50 in Tuesday’s regular session on the Comex division of the New York Mercantile Exchange.
The gains Wednesday came as investors awaited Bernanke’s outlook on the U.S. economy and employment trends for clues on whether the Fed might slow down the pace of its asset purchases.
Ahead of that, Fed New York President Dudley, who is a voting member of the central bank’s policy-setting committee, said in an interview on Bloomberg Television that officials need three to four more months before they will be able to know if the economy can shrug off the drag from fiscal policy.
James Steel, a bullion analyst at HSBC, wrote in a note to clients that if the Fed Chairman offered an optimistic view of the U.S. economy later on Wednesday, markets may conclude that he might be prepared to move toward an early exit from the central bank’s quantitative easing program.
“Conversely, if [Bernanke] conveys a cautious tone about the economy, then the opposite conclusion might be drawn about gold’s near-term price direction,” Steel added.
If gold has lost shimmer, how to invest now?
After cresting to highs, gold has been looking more earthbound recently. Is this the end of the bull market or just a pause? Scott Colyer, chief executive at Advisors Asset Management, joins Money Beat. Photo: Getty Images.
The Fed’s quantitative easing in the wake of the global financial crisis has been a key source of dollar weakness, which, in turn, tends to support gold prices.
Gold prices have dropped more than 17% so far in 2013, while the ICE dollar index — which measures the greenback against a basket of six major global currencies — has risen 5% during the same period.
On Wednesday, the ICE dollar index (TICKER:DXY) was at 83.850, compared with 83.877 in North America late on Tuesday.
Elsewhere in the metals complex, July futures for silver SIN3 +0.96% rose 32 cents, or 1.4%, to $22.70 an ounce.
Copper for delivery in the same month HGN3 +1.32% climbed nearly 2% to $3.41 a pound.
June palladium futures PAM3 +0.05% gained $1.90, or 0.3% to $750 an ounce. PlatinumPLN3 +0.84% rose $15.20, or 1%, to $1,473.60 an ounce, respectively.
