June 8 (Bloomberg) -- Gold futures fell for the second straight day on speculation that the Federal Reserve won’t ease U.S. monetary policy further, boosting the dollar and eroding the appeal of the precious metal as an alternative asset.
The greenback rose from a one-month low against a basket of six major currencies. Yesterday, Fed Chairman Ben S. Bernanke signaled that there won’t be a third round of so-called quantitative easing, and gold dropped 0.2 percent.
“Bernanke wasn’t as bearish on the economy as everyone thought he was going to be, and that was supportive for the dollar,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “Gold is reacting to the dollar.”
Gold futures for August delivery fell $5.30, or 0.3 percent, to settle at $1,538.70 an ounce at 1:48 p.m. on the Comex in New York. The metal has gained 24 percent in the past year, reaching a record $1,577.40 on May 2.
The Fed will end its second round of quantitative easing by buying back $600 billion in Treasuries by the end of the month.
Gold’s losses were limited as higher energy costs spurred inflation concerns. Crude-oil futures rose as much as 2.8 percent in New York.
“The energy tax is back on the table, and that will stop any breaks in gold,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.
Silver futures for July delivery fell 42.6 cents, or 1.1 percent, to $36.62 an ounce. The price has almost doubled in the past 12 months.
Palladium futures for September delivery declined $3.80, or 0.5 percent, to $805.70 an ounce on the New York Mercantile Exchange.
Platinum futures for July delivery rose 50 cents to $1,831.20 an ounce.
--Editors: Patrick McKiernan, Steve Stroth
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