Gold News

Gold Bounces After $20 Loss as Bernanke, Dimon & Paulson Speeches Move Markets

From Chris Mullen at

Gold Prices rose to $933.20 by late trade in Asia on Tuesday before falling over $20 to $912.45 by late morning in New York.

Fed chairman Ben Bernanke spoke at a conference in the morning and said that the US central bank is "considering several options, including extending the duration of our facilities for primary dealers beyond year-end."

Both the US Dollar index and Treasury bonds rose on the news.

J.P.Morgan CEO Jamie Dimon then spoke at midday and defended his Fed co-ordinated bailout of Bear Stearns, noting that a bankruptcy could have been a disaster for the financial markets.

The Dow, Nasdaq, and S&P eventually rose as oil fell over 3% after a report from the EIA showed that world demand finally fell off recently due to high prices. It closed almost $10 off its record made late last week.

Finally Treasury Secretary Paulson spoke in the final hour of trading and mentioned new ideas aimed at helping the US housing industry after pending US home sales for May fell 4.7% from April.

Gold finally rallied back higher in the last two hours of trade and ended with a loss of just 0.6%. The Gold Price in Euros remained at about €588, platinum lost $28 to $1944, and copper fell over 15 cents to about $3.71.

Silver rose to $17.95 and fell to $17.44 before it also rallied back higher and ended with a loss of 0.14%.

Gold miners and silver equities fell roughly 3% by late morning before they rebounded in afternoon trade, but they still ended with over 1% losses.

There are no major economic reports due out on Wednesday.

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Chris Mullen is chief content manager of the GoldSeek family of websites, a leading source of gold news, comment and mining-stock data for private and institutional investors.

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