AP: Gold Falls To $1,090 Ahead Of Bernanke Testimony, Silver And Platinum Follow
Gold prices fell today as the US dollar firmed ahead of Federal Reserve Chairman Ben Bernanke’s two day testimony to the US Congress, which is set to kick off today. Bernanke is expected to explain last week’s hike of the discount rate, charged by the Fed for emergency loans, by 25 points to 0.75%, which sent shudders through the markets, raising concerns that the expected tightening of monetary policy could come about sooner than expected. The speech is also expected to provide more clues as to the Fed’s future monetary policy, which could reverse the ongoing downfall in global equity markets.
Stocks in US, Europe and Asia fell after yesterday’s economic updates revealed lower consumer confidence in the US and business sentiment in Germany, curbing appetite for riskier assets such as precious metals to push down gold, silver and platinum.
The US Dollar Index, which measures the greenback’s strength against a basket of six currencies, eased to 80.765 as euro strengthened to support gold at US$1,090/oz.
Silver and platinum followed, sliding to US$15.71/oz and US$1,502/oz respectively.
Miners were in decline today with the exception of platinum producers Lonmin (LSE: LMI) and midcap Aquarius Platinum (LSE: AQP), which were flat.
In the FTSE 100, gold miner Randgold Resources (LSE: RRS) and silver producer Fresnillo (LSE: FRES) declined 1%. FTSE 250 constituents, silver producer Hochschild Mining (LSE: HOC) and gold miner Petropavlovsk (LSE: POG) also lost 1%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) shed less than 1%.
Australian gold and copper prospector Solomon Gold (AIM: SOLG) was the top performer in the sector, rallying 17.5%. Africa operating gold and platinum miner Goldplat (AIM: GDP) rose 4%.
Africa operating gold miner GMA Resources (AIM: GMA) headed in the opposite direction, shedding 10%. Africa focused gold deposit developer Cluff Gold (AIM: CLF) and commodity asset development company Mercator Gold (AIM: MCR) followed with losses of 4.5%. Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) was down 4%.
