Gold declines after Bernanke comments

The price of gold was lower again on Monday in New York as the dollar strengthened and Federal Reserve chairman Ben Bernanke said that inflation will remain low.

Bernanke’s remarks, in a speech to a group of economists in Washington, made gold less attractive as investment with buyers seeing less reason to protect their cash.

February gold was down $5.40 to $1,163.40 per troy ounce in New York after going as low as $1,136.30 per troy ounce before Bernanke’s remarks, but it took back some of its losess as the US dollar weakened again after his speech.

Other precious metals prices were also lower on the session, with March silver falling 14 cents to $18.38 per troy ounce while January platinum dropped $5.10 to $1,444.60 per troy ounce and, in mid-morning trade, March palladium had dropped $9 to $370.30 per troy ounce.

Among base metals, copper was down 3 cents to $3.21 per pound in New York, while three-month copper contrcts dropped 1 percent to $6,971 per tonne on the London Metal Exchange after LME inventories rose again to 452,550 tonnes, indicating continuing weakness in demand for the metal used in construction and manufacturing.

An analyst at Credit Suisse was quoted in reports as saying that inventories need to begin to fall before base metals prices can rally.

Nickel prices were up in London, but aluminium, lead, tin and zinc all saw price declines on the session.