NEW YORK (
were choppy Wednesday as investors stayed cautious during earnings season and digested
Gold for August delivery settled up 10 cents to $1,191.80 an ounce at the Comex division of the New York Mercantile Exchange, but prices were slipping more than $6 after the market closed. The gold price Wednesday has traded as high as $1,198 and as low as $1,187.70. The
was rising 0.40% to $83.11 while the
euro was slipping
1.02% to $1.27 vs. the dollar after
downgraded five banks in Portugal. The spot gold price Wednesday was losing $4, according to Kitco's gold index.
Risk appetite was waffling Wednesday
as investors cheered another blowout quarter from
, but the mood was still cautious as traders also had to digest uncharacteristically weak revenue from
. Gold prices were also victims of the same investment uncertainty.
Gold managed to rally almost $10 on Tuesday
as bargain-hunters bought gold below $1,200 an ounce as investors sought the safety of gold. Investors were tentatively interested in gold Wednesday as they tried to hedge against risk but also participate in any equity market rally.
Gold prices looked for direction from Bernanke and his two-day testimony to Congress over the health of the economy. Bernanke will be discussing the semiannual monetary policy report before the Senate Committee on Banking, Housing and Urban Affairs.
In a prepared statement, Bernanke reiterated the Fed's promise to keep rates low for an extended period of time while inflation remains subduded. His tone still reflected uncertainty over the viability of a U.S. economic recovery and there was no detail on quantitative easing. Investors quickly sold out of gold, opting for cash instead, as Bernanke's statement of lack of inflation spooked traders.
There is speculation that the
Fed will ease monetary policy
even further to ignite growth in the U.S. such as buying mortgage-backed securities or more government debt. Any sign of more spending or free money or money printing from the Fed will give a boost to gold as
on anticipated U.S. dollar weakness.
Over the short term, gold's correction could last a bit longer. The popular gold exchange-traded fund,
SPDR Gold Trust
, lost 6.09 tons on Tuesday as some traders rotated out of their gold positions.
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"I think people are perhaps repositioning themselves," says Adrian Ash, head of research for the
. "Looking to take trades off the table for the summer ... I think there is a lot of professional money that would quite like to stay on the beaches and not have to worry about positions they have open."
Ash is looking for a pop in gold prices starting Sept. 1 when traders come back into the market. "For myself, I'm looking for
gold prices to get to ... $1,500 sometime towards early next year."
rallied 11 cents to $17.80 while copper settled up 9 cents to $3.09.
Gold mining stocks, an alternative way to
, were mixed.
Freeport McMoRan Copper & Gold
was up more than 3% at $66.64 after reporting a blow out second quarter while
was flat at $15.79. Other large gold stocks
were trading at $56.53 and $15.85, respectively.
Written by Alix Steel in New York
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Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.