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Gold plunges on Bernanke's tact

June 7, 2012 at 4:52 PM
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NEW YORK, June 7 (UPI) -- Gold futures plunged Thursday after Federal Reserve Chairman Ben Bernanke avoided pledging any concrete stimulus steps the central bank might take.

In a speech prepared for the Joint Economic Committee on Capitol Hill, Bernanke suggested further stimulus measures could be effective in giving new life to a sluggish U.S. job market. But he didn't say when or how or anything else that resembled a commitment, despite recent remarks by other Fed officials that stimulus measures were needed.

Gold traders betting on a fresh round of quantitative easing, which would devalue the U.S. dollar, turned their positions around Thursday, with gold dropping $41.50, or 2.5 percent, to $1,592.70 per troy ounce.

Silver shed 92 cents to $28.56 per troy ounce, off 3.1 percent as the dollar index held close to even, rising 0.07 percent to 82.26 on the International Exchange.

On Wall Street, the Dow Jones industrial average closed ahead for the third consecutive day, despite a downturn that came after Bernanke's remarks turned the mood of the financial district from confident to cautious.

The euro fell to $1.256 from Wednesday's $1.2582. Against the yen, the dollar rose to 79.62 yen from Wednesday's 79.19 yen.

The British pound was $1.5528 from $1.5497. The dollar was 1.0277 Canadian dollars from 1.0276 Canadian.

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