Gold dropped nearly 2 percent on Thursday after US Federal Reserve Chairman Ben Bernanke offered few hints of further monetary stimulus, prompting investors to unwind bullish bets on expected easing after last week's dismal US payrolls report. Spot gold was down 1.7 percent at $1,589.30 an ounce by 2:38 pm EDT (1838 GMT), off an earlier high of $1,628.80 an ounce.
US COMEX gold futures for August delivery settled down $46.20 an ounce to $1,588. Trading volume was around 20 percent above its 30-day average, preliminary Reuters data showed, easily the higher turnover for this week. Gold retreated $40 from its early highs after Bernanke said the US central bank was ready to shield the economy if financial troubles mount but offered few hints that further monetary stimulus was imminent. Earlier, gold rose after China surprised markets with its first interest rate cut since the 2008 global financial crisis.
Silver was down 2.7 percent at $28.58 an ounce, wiping out most of its previous session's gains based on improved economic sentiment and Wall Street and industrial metals' rallies. Spot platinum fell 1.4 percent to $1,436.24 an ounce, while spot palladium inched down 0.3 percent to $621.22 an ounce.