Gold Challenges Record Close As Bernanke Signals End Of Recession

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Gold rallied on Tuesday amid inflation expectations as Federal Reserve Chairman Ben Bernanke said Tuesday that the U.S. is beginning to emerge from a deep recession that is technically over.

December gold finished at $1,006.30 per ounce, up $5.20 for the session. Prices reached as high as $1,011.50.

Gold challenged Friday's record close of $1,006.40. The all-time intraday high of $1,033.90 was reached on March 17, 2008. When adjusted for inflation, however, gold moved near $2,000 in 1980.

Speaking at a forum at the Brookings Institution in Washington, D.C. Bernanke said that that the economic crisis was leveling out, but repeated his calls for regulatory reform, saying that the financial crisis emphasized the need to "urgently" address financial weaknesses so that similar financial collapses don't happen again.

The dollar again its extended its lowest level against the euro in nine months. The buck also backed off a weekly high against the sterling.

There was also plenty of economic data to consider. A Commerce Department report showed that retail sales jumped 2.7% in August following a revised 0.2% decrease in July. Economists had been expecting a drop of 1.9%.

The U.S. Labor Department revealed Tuesday that producer prices jumped 1.7% in August, compared to a drop of 0.9% in the previous month. Economists had expected the measure to rise by 1.0 percent.

Core price climbed by 0.2%. This advance was a little sharper than the 0.1% increase that economists had projected.

And, the New York Fed said the general business conditions index rose to 18.9 in September from 12.1 in August. Economists had been expecting the index to edge up to a reading of 15.0.

On Wednesday, the consumer price index report is coming at 8:30 a.m. ET. CPI is expected to rise 0.3% in August after coming in unchanged in July. Core CPI for August is forecast to rise 0.1%, same as last month.

Industrial production data is coming at 9:15 a.m. ET. A rise of 0.7% is expected for August, compared to an 0.5% rise in July.

(Market News Provided by RTTNews)