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Gold Dips Despite Dovish Bernanke Testimony

Updated from 9:28 a.m. EDT with settlement prices

NEW YORK ( TheStreet) -- Gold prices closed lower in a choppy session on Wednesday as Federal Reserve Chairman Ben Bernanke's testimony to Washington lawmakers reiterated the central bank's commitment to an accommodative monetary policy.

Gold for August delivery at the COMEX division of the New York Mercantile Exchange lost $12.90 to settle at $1,277.50 an ounce. The gold price traded as high as $1,299.70 and as low as $1,269.30, while the spot price was slipping $15.47.

"Natural profit taking came as Mr. Bernanke did not offer anything new or unexpected for gold to be able to continue a rally," George Gero, precious metals strategist at RBC Capital Markets, wrote in a note on Wednesday.

Bernanke on Wednesday answered questions from the House Financial Services Committee, and is slated to testify in front of the U.S. Senate on Thursday.

In his prepared speech, Bernanke said the pace of the Fed's bond purchases are not on a pre-set course, and that the Fed may begin to taper its monetary stimulus in 2013 and possibly end in 2014.

These statements are not new from the Fed chairman, but they do leave open the possibility that the central bank has not set a hard date to scale back on its asset purchases.

Additionally, Bernanke's testimony said the labor market is improving gradually, but that it is far from satisfactory. Bernanke said that risks to the economy have eased since the fall of 2012.

The Fed will retain on its balance sheet the mortgage-backed securities and longer-term Treasuries purchased in its quantitative easing programs even after the bank ends stimulus. Bernanke will not give a hard date as to when the Fed expects to unwind its position in those assets.

Silver prices declined 52 cents on Wednesday as the September contract closed at $19.42 an ounce, while the U.S. dollar index increased 0.15% to $82.64.

-- Written by Joe Deaux in New York.

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