Gold futures fell $11 an ounce on Tuesday after the Federal Reserve Chairman Ben Bernanke hinted that the Fed will not implement any further cuts to borrowing costs for now, sending the dollar higher and dampening the investment appeal of the precious metal as an alternative investment.
Bernanke said in a speech today that Interest rates are well positioned'' to promote growth and stable prices, Bernanke said today in his first speech on the economic outlook in two months.
Gold futures for August delivery fell $11.50, or 1.3 percent, to $885.50 an ounce on the Comex division of the New York Mercantile Exchange. The contract has lost 14 percent from a record $1,033.90 on March 17.
The dollar index, which tracks the greenback against a basket of six major currencies, was at 73.261, compared with 72.72 before Bernanke's morning speech. See Currencies Report.
Bernanke's dollar-supportive words had a chilling and immediate effect,'' Jon Nadler, an analyst at Kitco Minerals & Metals Inc., said in a note. It is possible that today will be recorded as the turning point for the dollar.''
Also on the Nymex, July silver fell by 7 cents to finish at $16.84 an ounce.
July platinum fell $17.40 to end at $1,998.20 an ounce, while September palladium dropped $3.05 to close at $437.05 an ounce on the Nymex. July copper shed by 2.2 cents to close at $3.578 a pound.