SAN FRANCISCO (MarketWatch) — Gold futures ended lower Wednesday, extending losses to a third day as the dollar rose and U.S. Federal Reserve Chairman Ben Bernanke all but closed the book on further stimulus soon.
Gold for August delivery (CNS:GCQ2) declined $18.70, or 1.2%, to settle at $1,570.80 an ounce on the Comex division of the New York Mercantile Exchange.
Silver and most metals futures tracked gold lower, but copper ended higher after data on U.S. housing.
“[Bernanke] basically flat-out said we are not going to have QE3,” said Michael K. Smith with T & K Futures in Florida. “He told Congress it’s up to them to fix [the U.S. economy], not the Fed.”
Gold has been rangebound for the better part of this year and it is likely to continue that way until the dollar gives some more ground, he said.
The U.S. currency is likely to have topped for now, but things won’t change for gold until the ICE dollar index doesn’t roll back to 80 or so, Smith added.
The ICE dollar index (NYE:DXY) , which compares the U.S unit to a basket of six currencies, traded at 83.047, up from 83.075 late Tuesday. That kept some pressure on for gold and other dollar-denominated commodities.
A stronger dollar is negative for dollar-denominated commodities, as it makes them more expensive for holders of other currencies.
Gold ended a fraction lower Tuesday as Bernanke also dashed investors’ hopes that more stimulus would soon be forthcoming. Bernanke returned to Capitol Hill later Wednesday.
In other metals trading, silver for September (CNS:SIU2) delivery declined 22 cents, or 0.8%, to $27.10 an ounce.
October platinum (NYMEX:PLV2) was off $16.50, or 1.2%, to $1,404.20 an ounce. September palladium (NMN:PAU2) retreated $5.80, or 1%, to $577.55 an ounce.
September copper (CNS:HGU2) , however, advanced 2 cents, or 0.5%, to $3.47 a pound.
Earlier Wednesday, the Commerce Department said U.S. builders in June started construction of new homes at the fastest pace since fall 2008, but building permits fell.
Copper is highly sensitive to housing data. It is extensively used for electrical wiring.