Gold spikes then drops on Bernanke talk

GCM3
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Gold futures GCM3 +0.56%  went on a wild ride as Fed Chairman Ben Bernanke testified on Capitol Hill Wednesday, with prices going on a 40 point swing in minutes as markets struggled to interpret when the FOMC will begin to curb its accommodative policies.
Initially, gold GCM3 +0.56%  spiked as Bernanke began to talk, particularly as he said ”A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further.”
But after quickly rising to $1,410 an ounce, the precious metal began a sharp retreat, falling more than $40 an ounce to below $1,370 as Bernanke went on to say that Federal fiscal austerity measures are hurting the economy and that “with short-term interest rates already close to zero, monetary policy does not have the capacity to fully offset an economic headwind of this magnitude.” 
In recent action, gold has been trading below $1,380 an ounce.
– Tom Bemis