Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold finished 0.1% lower after Fed Chair Ben Bernanke kept mum on future monetary easing in testimony before the Senate today. While he acknowledged recent economic data as "generally disappointing" and reaffirmed his position that the Fed "is prepared to take further action," he stopped short of delivering specifics about when or whether he would undertake a third round of quantitative easing (QE3). Pressuring gold, the dollar rose on the lack of easing news. Another round of QE would be negative for the dollar and positive for gold because it is akin to printing new money, debasing the currency and increasing the risk of long-term inflation. Silver finished virtually even while platinum and palladium gained 0.2% and 1%, respectively.

At the close: August gold for dipped $2.10 to $1,589.50; September silver lost 1 cent to $27.32; October platinum gained $3.40 to $1,420.70; and September palladium picked up $5.50 to $583.35 an ounce.

U.S. consumer prices were almost flat in June as dropping energy costs offset a slight rise in food costs. The core inflation rate (CPI), which the Fed uses to set interest rate policy, dropped to 2.2% from 2.3% last month, in line with its falling trend since the winter. A dropping CPI gives the Fed more room to ease, since maintaining price-stability is one of its mandates. Many analysts still see QE3 on the horizon, perhaps as early as the late-July FOMC meeting in Jackson Hole, where QE2 was announced in 2010, coincidentally. The gold price rallied by more than 85% during QE1 and QE2, when the Fed added more than $2.3 trillion to its balance sheet by purchasing long-term bonds.