Gold prices remained calm today and closed slightly higher among quite trading. Gold struggled to make gains on Federal Reserve Chairman Bernanke's remarks and a stronger equities market. Gold eventually closed at $1,650.30, which is a $3.30 gain for the day.
By Tatyana Shumsky
March 21, 2012, 3:42 p.m. ET
Wall Street Journal
NEW YORK (Dow Jones)--Gold futures settled higher Wednesday, though the precious metal struggled to make gains in the face of a stronger equities market and amid caution surrounding Federal Reserve Chairman Ben Bernanke's remarks to Congress.
The most actively traded gold contract, for April delivery, rose $3.30, or 0.2%, to settle at $1,650.30 a troy ounce on the Comex division of the New York Mercantile Exchange.
The Standard & Poor's 500 stock index was recently up 0.1% at 1406.89. Equities continue to trade near four-year highs as investor sentiment about the U.S. economy gathers strength.
"It's very hard to want to be bullish the gold market when you have a rip-roaring stock market in front of you," said Ira Epstein, director of the Ira Epstein division of the Linn Group.
Gold trading volumes were quiet ahead of Fed chairman Bernanke's testimony to Congress. Traders were cautious ahead of the remarks as gold prices plummeted nearly $100 on Feb. 29, the last time Bernanke delivered a speech to Congress.
"His speech didn't do anything other than confirming he's still committed to keeping interest rates low," Epstein said. "While the market is anticipating that interest rates will go up sooner rather than later [Bernanke] is not saying it."
Gold market participants also continue to weigh in the likely impact of India's proposed higher gold import duty on that country's demand for the precious metal. Many gold retailers have shut their shops to protest the higher import and excise taxes, in a move that's expected to stall March gold imports.
"Imports have almost stopped," said Prithviraj Kothari, president of the Bombay Bullion Association. March imports are expected to total only 25 to 30 metric tons, he said.
Gold traders are keeping close watch on these developments as India is the world's largest consumer of the metal.
"Any longer-lasting period of subdued gold demand such as that seen in recent days in India...is likely to hinder any increase in the price of gold," said Commerzbank.
European debt worries simmered in the background as sovereign-debt yields rose in Spain and Italy. Spanish 10-year bonds ticked higher to nearly a one-month high of 5.405% from 5.239% on Tuesday.
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; email@example.com
--Debiprasad Nayak in Mumbai contributed to this article.
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