Gold Closes Below $1,600 on Bernanke’s Comments

On Thursday, gold (NYSEARCA:GLD) futures for August delivery dropped $46.20 to settle at $1,588 per ounce, while silver (NYSEARCA:SLV) futures fell 96 cents to close at $28.53.

Both precious metals suffered a sharp pullback as Federal Reserve Chairman Ben Bernanke testified to the Joint Economic Committee in Washington today. He noted risks in Europe and said the central bank was ready to take action, but he did not specifically make a commitment to more monetary easing.

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“The situation in Europe poses significant risks to the U.S. financial system and economy and must be monitored closely. As always, the Federal Reserve remains prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate,” Bernanke explained. The dollar index, which compares the greenback against six other fiat currencies, gained on the statements by the Fed and hit as high as 82.39.

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) fell 1.85 percent, while the iShares Silver Trust (NYSEARCA:SLV) declined 2.63 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Newmont Mining (NYSE:NEM) both dropped nearly 2 percent. Meanwhile, silver names such as Silver Wheaton Corp. (NYSE:SLW) and First Majestic (NYSE:AG) fell 2.56 percent and 1.70 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS