Gold fell Wednesday in electronic trading as investors took profits, economists heralded a positive indicator and Wall Street held its collective breath that the chairman of the U.S. central bank would signal support in a key speech later this week.

Investors focused on a Friday speech by Fed Chairman Ben Bernanke as the event in which he may signal a willingness to wade back into the bond market to stimulate the economy.

The market has rallied on Jackson Hole optimism. We hope that Bernanke pulls a rabbit out of his hat again and that could be buying lower quality assets with the Fed's balance sheet, Richard Greenwood, fund manager at Bedlam Asset Management, which manages about $700 million, told the Economic Times.

He has to be creative as he hasn't got much options left, Greenwood said. It's just a relief rally, and it is sustainable only when data and sentiment get better.

The stock market also was lifted by a Commerce Department report that said orders for durable goods jumped four percent last month after a 1.3 percent drop in June. Analysts were looking for a two percent rise. The report eased fears the economy was slipping back into recession, after a series of weak sentiment surveys.

It's consistent with the idea of positive growth but not especially strong. The underlying trend is certainly good, Scott Brown, chief economist at Raymond James in St. Petersburg in Florida, told Reuters.

Some investors took profits from an investment that, if made on Jan. 1 of this year, would have appreciated 33 percent.

Gold for December delivery dropped $107.30 or 5.7 percent on the CME Comex division of the New York Mercantile Exchange, or more than eight percent from the record $1,911.46 an ounce hit on Tuesday.

Stocks, meanwhile, rose on all major indexes. Shortly before the closing bell the S&P 500 was up 1.3 percent to 1,177.22 and the Dow Jones industrial average climbed 1.2 percent to 11,315.30.