COMEX gold fell to its lowest price in a month early Wednesday, as investors awaited comments by US Federal Reserve Chairman Alan Greenspan, betting that additional dollar-supportive rate tightening was coming.
The Fed chief will testify on the economy to the House Budget Committee, beginning at 10:30 am EDT (1430 GMT). Markets expect he will confirm that the central bank will continue raising interest rates at a measured pace, and suggest that the summer economic slowdown was temporary.
December gold at 9:25 am was down $2.10 at $397.20 an ounce, trading from $402.60 to $396.90, its lowest price since August 13. "The fundamentals don't look good for gold. You have the dollar strengthening. The US economy isn't as bad as everyone thinks it is," said a dealer at a metals trading firm.
Dealers said the failure to hold above $410 after several tries was bearish and new shorts were being established on the way down. A new $370-$390 trading range was likely, one said, although safe-haven buying should remain a positive factor.
Spot gold was quoted at $395.25/6.00, down from $397.05/7.80 late Tuesday. London's morning fix was $398.10.
December silver was off 6.5 cents at $6.17 an ounce. It traded from $6.28 to $6.10, its cheapest price since July 7, after skidding 35.5 cents in thin trade Tuesday. Spot silver was at $6.12/15, down from $6.16/19 at the close. The fix was at $6.18. October platinum was down $12.30 at $833.00 an ounce. Spot fetched $830.00/835.00. December palladium was off $1 at $206.50 an ounce. Spot palladium was quoted at $204.00/208.00.