Metals Price Watch: Gold Price Slides ahead of Bernanke’s Testimony

By:
on Jul 17, 2013
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iNVEZZ.com, Wednesday, July 17: The gold price today slid as the dollar showed some strength ahead of Fed Chairman Ben Bernanke’s congressional testimony scheduled for 14:00 GMT. Traders have been awaiting the testimony, hoping to get more clues on the US central bank’s plans regarding quantitative easing, one of the most important drivers of the gold price in recent years.

The copper price today rallied on the London Metal Exchange, climbing close to the one-month high of $7,049.25 a metric ton hit on July 11, before retreating below $7,000 later in the day, pressured by firmer dollar.
**Gold and silver**
The gold price was 0.6 percent down at $1,284.81 an ounce at 9:34 GMT as investors grew nervous ahead of Bernanke’s testimony. The metal idled in that region and was to be found at $1,284.53 an ounce about 13:30 GMT.

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Bernanke is expected to reiterate Fed’s support for the U.S. economy but he is also likely to remind that the monetary stimulus won’t last forever.
Fears that the Federal Reserve will scale back debt purchases from their current levels of $85 billion a month has been the main reason for the near-25 percent plunge in gold price this year. The strongest indication for that was given at the Federal Open Market Committee meeting last month, when Bernanke said that the Fed planned to curb stimulus as the US economy was improving. Last week, Bernanke’s became more dovish, which prompted a rebound in gold.

“Bernanke appeared to scale back some of the more aggressive comments regarding curtailment of QE and focused on additional monetary stimulus for the remainder of this year,” said Jonathan Butler, an analyst at Mitsubishi, as quoted by Reuters. “If there’s a reiteration of that, we might well see gold push a bit higher.” But Butler didn’t exclude the possibility of “some choppy trading” occurring later on Wednesday as “there tends to be a great deal of volatility in and around the comments”.

The silver price was at $19.98 as of 13:57 GMT.
**Base metals**
!m[Copper Price Retreats from Near One-Month High ](/uploads/story/4081/thumbs/pic1_inline.jpg)
The copper price climbed as high as $7,046 a metric ton in early trading on the LME but firmer dollar and news of a sharp increase in output at the world’s biggest copper mine, Escondida in Chile, halted its rally. Three-month copper has retreated to $6,925 a ton by 9:39 GMT, down 1.04 percent.

BHP Billiton, Escondida’s majority owner, said that copper output at the mine rose 28 percent to 1.1 million tonnes in the 2013 fiscal year.
In other base metals traded on the LME the zinc price lost 1.09 percent to $1,867.50 a metric ton, the aluminium price fell to $1,810.50 and the led price declined to $2,054.25. The nickel price shed $6 to $13,764 and the tin price has lost $44 to $19,411.

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