Transcript from 2 March 2012, written by Ben Traynor

Gold had something of a Road Runner moment this week. Having edged up $60 an ounce despite quiet physical demand last week, gold then did its best Wile E. Coyote impression on Wednesday, falling off a cliff as Federal Reserve chairman Ben Bernanke appeared before Congress.

The markets seemed disappointed that the Fed chairman did not give any strong hints that further quantitative easing was on the way. Bernanke also repeated the Fed's 2% inflation target unveiled back in January. The Federal Open Market Committee had discussed setting an inflation target back in November. Minutes from that meeting state that the Committee "noted that such a step could be misperceived as placing greater weight on price stability than on maximum employment."

This week however Bernanke seemed happy to take such a risk. Given the absence of strong physical demand, gold and silver were always vulnerable to a bit of Dollar strength, which Bernanke's comments appeared to provide.

Wednesday's drop will also have been exacerbated by trading stop losses placed during gold's recent rise. But it also suggests that much of that rise was based on expectations of further Fed policy easing that may have been dashed, at least for now.

Despite the drop, Wednesday's PM London Fix price of $1770 was the second highest month end fix in history, although the fixing did take place just as Bernanke had started speaking.

Friday's PM London Fix gold price was $1707, a 4% fall on last week.

Silver's Friday fix price was $35.21 an ounce, a weekly fall of 1%. Unlike gold, however, silver was still showing a monthly gain on Friday, up 3.8% from its Fix price on the first Friday of February. The gold-silver ratio has fallen sharply since the start of last month, thanks largely to silver's big upward move begun at the end of last week.

The other big monetary news this week was the European Central Bank's second three-year liquidity operation, now widely being dubbed the LTRO. European banks borrowed nearly €530 billion, an 8% increase on December's LTRO figure. It remains to be seen how much of this will find its way to the real economy, with much of it currently parked as ECB overnight deposits.

Next week sees a host of employment data from various countries, culminating in US nonfarm payrolls on Friday.