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Gold and silver both sold off hard on Wednesday after Federal Reserve Chairman Ben Bernanke offered an upbeat assessment of the state of the U.S.
economy in his testimony before the U.S. House Committee on Financial Services.In particular, Bernanke said that he was surprised that the unemployment rate had come down to 8.3% this soon this year.
With the recovery gathering momentum–the Commerce Department revised its estimate of fourth-quarter GDP growth to 3.0% from 2.8%–this suggests that Bernanke will not resort to another round of bond purchases to help stimulate growth, or at least boost asset prices.
The SPDR Gold Trust (GLD) fell 5.3% to $164.29, less than $1 above possible support its 50-day moving average.
Gold’s wilder sister, silver, was also hammered. The iShares Silver Trust (SLV) tumbling 6.4% on trading volume five times as heavy as it has been on average for the past three months. The move took SLV slashing through its longer-term bullish support at the 200-day moving average.
Silver producers like Pan American Silver (PAAS) andSilver Wheaton (SLW) fared better than the metal on Wednesday, losing 4.3% and 3.8%, respectively.
Leading gold miners also held up slightly better than the bullion. Goldcorp traded lower by 3.1% andNewmont Mining dropped by 4.2%, both on massive volume. Barrick Gold (ABX) lost 3.5%.
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source: forbes.com
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