Gold futures dropped 2 percent Tuesday on profit taking triggered by comments by Federal Reserve Chairman Ben Bernanke that inflation pressures had dramatically receded. Gold for April delivery was down $20.00, or 2.0 percent, to $975.00 an ounce at 11 am EST (1600 GMT) on the COMEX division of the New York Mercantile Exchange. Ranged between $997.00 and $970.00.
Bullion accelerated losses after Bernanke said inflation pressures had receded dramatically as oil and commodity prices had fallen and slack had built up in the economy. Gold pressured ahead of President Obama's address to Congress on Tuesday night on how he plans to rescue the shaky financial system and pull the country out of recession.
The bullion market will continue to focus on and be affected by political issues, said Tom Pawlicki, precious metals and energy analyst at MF Global. Weakness seen due to COMEX gold options expiration on Tuesday, said dealers. Gold/oil ratio rose to 25.4 on Tuesday from 25.9 in the previous session. Investment demand provided underlying support to prices.
New York's SPDR Gold Trust, commonly known as GLD, said its holdings remained at a record 1,028.98 tonnes as of February 23. Spot gold was at $974.50 an ounce, down 1.7 percent against its last quote in New York late on Monday. COMEX March silver down 22.5 cents, or 1.6 percent, at $14.225 an ounce on gold's retracement. Range $14.150 to $14.575 an ounce. Spot silver at $14.25 an ounce, down 1.1 percent from its Monday finish.
NYMEX April platinum down $29.50, or 2.6 percent, at $1,050.00 an ounce on broad-based precious metals decline. Spot platinum at $1,041.50 an ounce, down 2.8 percent from its previous close. March palladium eased 45 cents to $199.80 an ounce, following Monday's sharp decline due to stop-loss orders and fund selling. Spot palladium was at $197.50, up 1.0 percent from its late Monday New York quote.