From Chris Mullen at GoldSeek.com...
Gold rose to $896.80 and silver climbed to $16.93 by late trade in Asia on Tuesday before both metals dropped hard as Ben Bernanke, chairman of the US Federal Reserve, spoke on the Dollar.
His speech lifted the Dollar two cents to the Euro, while gold fell as low as $877.30 and silver dropped to $16.495 per ounce.
The metals then rallied back higher into the close, with the Gold Price losing 1.3%.
Oil fell on worries over falling demand as the US Dollar index rose after Bernanke acknowledged its recent weakness and hinted that the Fed may do something about it in the future.
But no fundamental plans or policy changes were announced, and Treasury bonds – which would suffer if the Fed actually raised interest rates – eventually rose after the Dow, Nasdaq, and S&P began to fall in early afternoon trade on continued worries about the financial sector.
Dismal auto sales numbers added to the sour mood on Wall Street as rumors surfaced about Lehman’s possible need to raise $3-4bn in fresh capital. All three indices rebounded in late trade and ended off their worst levels of the session after Lehman denied rumors that it was in trouble.
The Gold Price in Euros slipped 0.5%, platinum lost $14 to $1992, and copper fell a couple of cents to about $3.59.
Gold and silver equities rose slightly in midmorning trade, but they then fell back off with the major indices in afternoon trade and ended with about 2% losses.
Wednesday at 13:15 GMT brings the ADP Employment report for May, expected to show a loss of 30,000 in US payrolls. Then comes first quarter Productivity Growth, expected at 2.5%, and finally the ISM Services report for May expected at 51.0.
Looking to Buy Gold today? Make it cheap, simple and ultra-secure at BullionVault...