Gold took market participants for a wild ride yesterday as Fed Chairman, Ben Bernanke testified

Gold took market participants for a wild ride yesterday as Fed Chairman, Ben Bernanke testified before congress. The yellow surged as testimony got underway, fixing at $1408.50 just before a punishing move to the downside that had gold trading in the $1350’s and eventually closing the day at $1367.40. The basic gist of Mr. Bernanke’s comments regarding the future of QE - it depends. A “premature” pull back on asset purchases could have a detrimental effect on the economic recovery but a continued improvement, evidenced by any improvement in future economic data, could signal that it’s time to pull on the reigns. The tapering of QE3 could come as early as the next few FOMC meetings, or not. If past benchmarks are still truly benchmarks – inflation and unemployment – unless the economy can somehow get that 7.5% unemployment rate down 1% in the next few months, it’s unlikely we’ll see an end or a significant decline in the rate of asset purchasing by the Fed. Where does this leave us? Pretty much where we left off before the Chairman’s rhetoric...both in our knowledge of QE’s future and gold’s price. Gold closed Tuesdays session at $1377 and was relatively unchanged before 10:00 AM Wednesday. The yellow metal now trades just a few dollars higher at $1383. Chairman Bernanke would make a great weatherman…”it might rain tomorrow, but it might not”. Elsewhere in the financial landscape equities are taking some heat this morning following not-so-good data out of China. The world’s second largest economy saw its manufacturing PMI index slip into contraction territory for the first time in seven months pushing world markets into negative territory for their respective sessions. The Nikkei took a 7.3% haircut and now the spillover effect has US markets in the red early on. PGMs are under some pressure following the dismal data, platinum is off more than $10 while palladium trades at $739…more than 1.5% off to start the day.US first time unemployment claims fell by 23K last week but we’ll have to wait until June 7^th to get a better view of the jobs picture here in the states. Have a great day.