Gold Retreats From Gains, With Fed In View

Gold futures slipped in electronic trade Tuesday, taking back most of the gains made in Monday trading, but with some analysts optimistic for the week ahead.

Comex gold for August delivery  eased $4.60, or 0.4%, to $1,278.90 an ounce, after having settled $5.90 higher in Monday’s session on the New York Mercantile Exchange.

However, HSBC analysts James Steel and Howard Wen said that the metal could make a move higher based on congressional testimony from Federal Reserve Chairman Ben Bernanke, slated for Wednesday and Thursday.

“The market’s anticipation that Mr. Bernanke will continue to emphasize his earlier views on easy monetary policy may help lift gold prices, we believe,” they wrote late Monday.

Many analysts have linked the Fed’s ultra-loose monetary policy to gold’s sharp gains since the global financial crash of 2008. Just prior to the financial crisis outbreak, gold futures traded around the $750-an-ounce level.

The HSBC analysts also cited a cut to production guidance at AngloGold Ashanti Ltd.  , the world’s No. 3 gold extractor.

But they also said that “gold prices are less sensitive to mine production cuts when compared to the [platinum-group metals], as bullion mine output is more globally disperse and above-ground stocks ample.”

In other metal-futures moves, September silver  slipped 12 cents, or 0.6%, to $19.72 an ounce, while platinum for October delivery  fell $3.90, or 0.3%, to $1,417.50 an ounce, and September palladium  gave up $2.20, or 0.3%, to $729.95 an ounce.

September copper  added a penny, or 0.2%, to $3.15 a pound.

Copper showed little reaction to Rio Tinto Ltd.   saying Tuesday in its quarterly production report that activity at one of its major copper mines in the U.S. was recovering faster than anticipated.

Rio Tinto ranked No.10 among the world’s copper producers last year, according to Mining.com data.

Source : Marketwatch