Investing.com - Gold prices erased earlier gains in U.S. trading on Wednesday after Federal Reserve Chairman Ben Bernanke said monetary stimulus policies will stay in place though scale backs were possible if economic indicators improve.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 0.48% at USD1,371.05 a troy ounce in U.S. trading on Wednesday, up from a session low of USD1,365.95 and down from a high of USD1,413.05 a troy ounce.
Gold futures were likely to test support USD1,323.00 a troy ounce, the low from April 16, and resistance at USD1,444.15, the high from May 14.
In prepared testimony in Congress earlier, Bernanke said ultra-loose monetary policy was providing "significant benefits" to the economic recovery and reiterated that the bank’s asset-purchasing program will remain in place for now.
Bernanke added withdrawing monetary stimulus could prompt interest rates to rise temporarily but could threaten the country's economic recovery as well as price stability down the road.
"A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," Bernanke said in prepared remarks of his testimony.
"Such outcomes tend to be associated with extended periods of lower, not higher, interest rates, as well as poor returns on other assets. Moreover, renewed economic weakness would pose its own risks to financial stability."
Bernanke added that while the labor market is showing signs of improvement, long-term employment rates remain high and consumer inflation low.
Stimulus measures currently in place, such as the Fed's monthly USD85 billion bond-buying program, weaken the dollar by flooding the economy full of liquidity to keep interest rates low and encourage investing and hiring, a recipe for rising gold prices.
Gold and the U.S. dollar tend to trade inversely from one another.
The dollar, meanwhile, regained its strength after Bernanke said the U.S. central bank may scale back its stimulus measures "in the next few meetings" if the labor market makes noted improvements.
Elsewhere on the Comex, silver for July delivery was up 0.06% at USD22.468 a troy ounce, while copper for July delivery was up 1.25% and trading at USD3.385 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 0.48% at USD1,371.05 a troy ounce in U.S. trading on Wednesday, up from a session low of USD1,365.95 and down from a high of USD1,413.05 a troy ounce.
Gold futures were likely to test support USD1,323.00 a troy ounce, the low from April 16, and resistance at USD1,444.15, the high from May 14.
In prepared testimony in Congress earlier, Bernanke said ultra-loose monetary policy was providing "significant benefits" to the economic recovery and reiterated that the bank’s asset-purchasing program will remain in place for now.
Bernanke added withdrawing monetary stimulus could prompt interest rates to rise temporarily but could threaten the country's economic recovery as well as price stability down the road.
"A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," Bernanke said in prepared remarks of his testimony.
"Such outcomes tend to be associated with extended periods of lower, not higher, interest rates, as well as poor returns on other assets. Moreover, renewed economic weakness would pose its own risks to financial stability."
Bernanke added that while the labor market is showing signs of improvement, long-term employment rates remain high and consumer inflation low.
Stimulus measures currently in place, such as the Fed's monthly USD85 billion bond-buying program, weaken the dollar by flooding the economy full of liquidity to keep interest rates low and encourage investing and hiring, a recipe for rising gold prices.
Gold and the U.S. dollar tend to trade inversely from one another.
The dollar, meanwhile, regained its strength after Bernanke said the U.S. central bank may scale back its stimulus measures "in the next few meetings" if the labor market makes noted improvements.
Elsewhere on the Comex, silver for July delivery was up 0.06% at USD22.468 a troy ounce, while copper for July delivery was up 1.25% and trading at USD3.385 a pound.