Los Angeles, CA – The precious metals complex is trading slightly lower this week after disappointing comments made by Federal Reserve Chairman Ben Bernanke before lawmakers Tuesday. In addition, traders and investors are showing a general “risk-off” mentality Wednesday as factors from “outside markets”, namely a strong U.S. dollar and slightly lower crude oil prices, caused a dip in precious metals prices. Comex gold futures traded moderately lower, falling $2.60 to $1580.00 an ounce Wednesday morning. September Comex silver also traded down $.23 at $27.08 an ounce.
Chairman Bernanke’s comments to law and policymakers saw traders and investors disappointed as the remarks did not bring light to any clues on easing of U.S. monetary policy. In his speech on Tuesday, Bernanke told a Senate panel there is little he can do to offset the likely economic damage if Congress drives the U.S. economy off a fiscal cliff. “I don’t think that’s my responsibility,” said Bernanke to the Senate Banking Committee. “I’ve been assigned to focus on maximum employment and price stability, not to hold threats over Congress’ head. Congress is in charge here, not the Federal Reserve.”
But with Congress still in deadlock in an election year and unwilling to come to terms with massive tax increases and a spending cuts package that would threaten to rule out a faltering U.S. recovery, the Federal Reserve remains on standby to aid with additional stimulus if necessary. “Reflecting its concerns about the slow pace of progress in reducing unemployment and the downside risks to the economic outlook, the Committee made clear at its June meeting that it is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in the labor market conditions in a context of price stability.” Many investors await the August FOMC meeting in high hopes that the Fed will announce another round of Quantative Easing, or QE3. If another round of U.S. monetary easing is carried out, many analysts believe gold and silver will jump in price substantially.
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