Gold price takes a dive

The Gold price took a dive today after Federal Reserve Chairman Benjamin Bernanke gave no indication of further monetary easing by the Fed. Bernanke testified before the Joint Economic Committee today. He pressed Congress to pass legislation to avoid the “fiscal cliff” coming at the end of the year, when automatic spending cuts will kick in and tax cuts will expire. “That being said, there’s strong support (for Gold) at the $1,600 level, as generally the market feels that QE3 or more accommodation is just a matter of when and not if,” said Tom Essaye, editor of the 7:00’s Report.

Ratings agency Fitch downgraded Spanish debt to BBB from A today on concerns that the country will need a bailout package to avoid economic disaster. Furthermore, Fitch’s outlook is negative, which means that more downgrades are likely. German Chancellor Angela Merkel reacted by reiterating Germany’s commitment to helping its weaker eurozone partners. “It is important to stress again that we have created the instruments for support in the eurozone and that Germany is ready to use these instruments whenever it may prove necessary,” she said.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,589.70, Down $44.00.
  • Silver, $28.64, Down $0.94.
  • Platinum, $1,441.40, Down $29.80.
  • Palladium, $623.10, Down $9.70.
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