Having lost value during seven of the past eight trading sessions, bullion was following suit one day before Ben Bernanke appears on Capitol Hill. Amid speculation that he will signal the economy-spurring measures of quantitative easing soon will be tapered, the U.S. dollar grew stronger.
The yellowish metal and the world's reserve currency typically perform the inverse of one-another.
"Gold and silver fell in this big black hole yesterday … and although we saw some buying interest overnight, fundamentals haven't changed," senior manager Ole Hansen with Saxo Bank told Reuters on Tuesday. "The dollar is strong, the U.S. stock markets are holding up and bond yields are climbing, so the market is trading in defensive mode ahead of the Federal Reserve's testimony."
At 11:51 a.m. on Tuesday, gold futures fell 1.53 percent, a $20.98 dive to $1,372.56 per troy ounce.
Additional Fed prompts
The minutes from the policy-making arm of the U.S. Federal Reserve's meeting last month also are slated to be released on Wednesday. The discussion by the Federal Open Market Committee will be publicized on the same day that Bernanke appears before congress.
Earlier this week, President Charles Evans with the Chicago Federal Reserve said the central bank is slated to continue asset purchases through this coming summer but might wrap up during the fall.
But that's if the central bank is pleased with the state of the labor market in the globe's largest economy, Evans said on Monday.
Dive follows gains
One trading session after surging 1.4 percent, and closing its longest bearish trend in about 48 months, the yellowish metal was plunging, according to Bloomberg.
The minutes of the Federal Open Market Committee are forecast to be quite enlightening to analysts, investors and additional observers who follow market trends.
"Tomorrow's minutes are very important as there is some concern that the Fed may want to cut back on the stimulus," president Michael Smith with T&K Futures & Options in Port St. Lucie, Florida, told the news source on Tuesday. "Also, the dollar's strength is working against gold."
With 12 consecutive years of gains under its belt, gold was down 17 percent through Monday, according to Bloomberg.
The yellowish metal last month plunged into a bear market, affirming the speculation of investors who noted the precious metal may be overvalued.
Evans, of the Federal Reserve in Chicago, said on Monday that the U.S. economy is driving at a strong rate of recovery, Bloomberg reports.
MarketWatch reports the precious metal is hinging on the Bernanke testimony before the Joint Economic Committee.
He is forecast to discuss the economic outlook for the nation.
"Gold is focused on movement of U.S. dollar, fundamentally, and the Fed," managing director Jeffrey Wright with Global Hunter Securities told MarketWatch on Tuesday. "The Fed's timetable on [quantitative easing] is influencing the U.S. dollar."
Gold prices fluctuated throughout the day, but it dipped down to nearly $20 in the red once trading closed.
The most recent time that the precious metal endured eight consecutive trading sessions of losses was in 2009.
The stronger performance early on during the Monday trade session was linked with Moody's Investors Service issuing a warning to the U.S. that it would downgrade the nation's debt. That tugged down the U.S. dollar, which prompted the yellowish metal to surge.
The record price for gold futures is $1,923.70 per troy ounce as established on September 7, 2011.
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