Gold News

Gold Ends Weds 1.3% Higher as Bernanke Talks Down the Dollar to a New Record Low

From Chris Mullen at GoldSeek.com...

Gold Prices rose as high as $964.70 by late trade in Asia on Wednesday before falling to see only about a 0.5% gain by late morning in New York.

But the Gold Market then rallied higher for most of the rest of US trade and ended with a gain of 1.3% at a new record closing high thanks to Fed chairman Ben Bernanke, who stated in his semi-annual testimony before Congress that the US economic situation has become distinctly less favorable.

That was interpreted by many to mean the Fed will almost certainly be cutting rates by another 50 basis points at their next meeting on March 18th. The US Dollar index fell markedly to another new record low on Bernanke's testimony.

Treasury bonds fell, however – despite a 5.3% collapse in Durable Goods Orders reported for Jan. – as the Dow, Nasdaq, and S&P rose on news that the OFHEO agency has raised its mortgage portfolio insurance limits for Fannie and Freddie Mac in a bid to ease liquidity concerns in the US housing market.

Hitting a new record high of $102.08 overnight, crude oil fell back below $100 in New York trade after inventory reports came in better than expected. Crude inventories built 3.2 million barrels, gasoline inventories built 2.7 million barrels, and distillates fell 2.5 million barrels.

Refinery runs also rose a better than expected 1.2% to 84.7%.

Silver rose to a new 27 year intraday high of $19.465 in London before it dropped to $18.90 by late morning in New York, but it also rallied back higher in the last couple of hours of trade and ended with a gain of 2.6% at a new 27 year closing high.

The Gold Price in Euros rose to €634, platinum lost $1 to $2129, and copper rose nearly 6 cents to about $3.84.

Gold and silver equities (the XAU and HUI) rose over 3% to new record intraday highs before they fell back off a bit in the last few hours of trade along with the major indices, but they still ended with over 2% gains at new record closing highs. The GDM closed less than 1% away from a new high.

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Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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