Daily Gold Update

Source: Marketwatch

New York— Gold futures fell Monday for a second session, pulling back from record highs, as comments from Federal Reserve Chairman Ben Bernanke that inflation will remain "subdued" reduced the metal's appeal as a hedge against rising prices. "The Fed is committed to keeping inflation low and will be able to do so," Bernanke said to a group of economists in Washington. However, inflation "appears likely to remain subdued for some time." Gold for December delivery dropped $5.40, or 0.5%, to end at $1,163.40 an ounce on the Comex division of the New York Mercantile Exchange.

The contract had been lower ahead of Bernanke's comments, falling as far as $1,136.30 an ounce, or the lowest intraday level since Nov. 20, on speculation that a faster recovery in the U.S. labor market could push the Fed to raise interest rates sooner than expected. Bernanke said in a midday speech the central bank will raise interest rates, but he emphasized that time could be far away. "Bernanke's inflation talk makes gold a little bit less attractive," said George Gero, a precious-metals trader for RBC Capital Markets. But "we may see a rally upcoming as gold pared considerable losses" with the dollar falling again. See full story.