Investing.com - Gold prices dropped in U.S. trading on Wednesday after investors priced in Federal Reserve Chairman Ben Bernanke's dovish testimony before both houses of the U.S. Congress and later sold for profits.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were down 1.25% at USD1,595.30 a troy ounce in U.S. trading on Wednesday, up from a session low of USD1,593.10 and down from a high of USD1,614.40 a troy ounce.
Gold futures were likely to test support USD1,574.80 a troy ounce, Monday's low, and resistance at USD1,619.40, Tuesday's high.
Bernanke told the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday that loose monetary policies haven't opened the door to asset bubbles in financial markets or more pronounced inflationary pressures.
The Federal Reserve is currently running a USD85 billion monthly bond-buying program, a monetary stimulus tool known as quantitative easing that weakens the dollar to spur the economy, which pushes up gold prices as a side effect.
The Fed has also said near-zero interest rates will stick around for a while, and market sentiment that loose policies will stay in place for now sent gold prices rising to levels ripe for profit-taking on Wednesday.
Improving economic indicators and better-than-expected quarterly earnings have fueled expectations that the U.S. economy is on the mend and will soon stand on its own without monetary stimulus measures, and end of which could curb demand for the precious metal as a hedge to a weaker dollar.
In the U.S. earlier, the Commerce Department reported that orders for durable goods dropped 5.2% in January compared with market calls for a decline of 4.4%.
However, core durable goods orders, which exclude volatile transportation items, rose 1.9% last month, beating expectations for a 0.2% increase.
Meanwhile, the National Association of Realtors reported that its pending home sales index rose by 4.5% in January, beating expectations for a 1.5% gain.
Meanwhile on the Comex, silver for May delivery was down 1.18% and trading at USD28.973 a troy ounce, while copper for May delivery was down 0.34% and trading at USD3.571 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were down 1.25% at USD1,595.30 a troy ounce in U.S. trading on Wednesday, up from a session low of USD1,593.10 and down from a high of USD1,614.40 a troy ounce.
Gold futures were likely to test support USD1,574.80 a troy ounce, Monday's low, and resistance at USD1,619.40, Tuesday's high.
Bernanke told the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday that loose monetary policies haven't opened the door to asset bubbles in financial markets or more pronounced inflationary pressures.
The Federal Reserve is currently running a USD85 billion monthly bond-buying program, a monetary stimulus tool known as quantitative easing that weakens the dollar to spur the economy, which pushes up gold prices as a side effect.
The Fed has also said near-zero interest rates will stick around for a while, and market sentiment that loose policies will stay in place for now sent gold prices rising to levels ripe for profit-taking on Wednesday.
Improving economic indicators and better-than-expected quarterly earnings have fueled expectations that the U.S. economy is on the mend and will soon stand on its own without monetary stimulus measures, and end of which could curb demand for the precious metal as a hedge to a weaker dollar.
In the U.S. earlier, the Commerce Department reported that orders for durable goods dropped 5.2% in January compared with market calls for a decline of 4.4%.
However, core durable goods orders, which exclude volatile transportation items, rose 1.9% last month, beating expectations for a 0.2% increase.
Meanwhile, the National Association of Realtors reported that its pending home sales index rose by 4.5% in January, beating expectations for a 1.5% gain.
Meanwhile on the Comex, silver for May delivery was down 1.18% and trading at USD28.973 a troy ounce, while copper for May delivery was down 0.34% and trading at USD3.571 a pound.