Gold Little Changed As Investors Await Bernanke Testimony

LONDON (July 16) Gold swung between gains and losses Tuesday, as investors looked past weaker-than-expected retail sales data to Federal Reserve Chairman Ben Bernanke’s congressional testimony later this week for more clarity on the central bank's stimulus-easing plans.

As of 03:10 ET, gold for immediate delivery fell 0.20 percent or 2.62 points to trade at $ 1,282.08 after opening at $1,282.26, having earlier hit a high of $1,284.76, and a low of $1,277.13.

Recent signs the Fed’s will maintain monetary stimulus contributed to the biggest weekly advance for precious metals since 2011 as weaker-than-expected U.S. retail sales raised the prospect that the US recovery may be stalling.

U.S. retail sales rose less than expected at a seasonally adjusted figure of 0.4 percent in June, slowing from a 0.5% increase in May and well short of market calls for a 0.8% increase, according to data released Monday.

Separately, the Empire State manufacturing survey for July rose for the second month, posting a reading of 9.5 from 7.8 last month.

The numbers sent gold prices rising by fueling sentiments that if the U.S. economic recovery kept proving less robust, the fed’s may take longer to throttle back it quantitative easing program.

Other precious metals were as follows:

• Silver lost 0.12% to trade around $ 19.85
• Platinum declined 0.51% to $ 1,413.50
• Palladium inched 0.21% down to $ 730.70

Investors will closely examine Bernanke's semi-annual testimony to congressional committees on Wednesday and Thursday, for further clues on when the central bank would start tapering its monetary stimulus.

Last week, Fed Chairman Ben Bernanke said that highly accommodative monetary policy for the foreseeable future is what's needed in the U.S. economy.

Bernanke’s comments caused asset prices to move sharply higher after saying the bank will likely keep some of its easy-money policies amid high unemployment rates and low inflation levels.

The dollar softened against most currencies ahead of Bernanke's congressional testimony on July 17-18. If the Fed decided to start tapering off Quantitative Easing (QE), which floods markets with cheap money, it will further strengthen the dollar and tarnish gold's status as a store of wealth.