Gold Drops as Fed Chief Fails to Discuss Further Stimulus

Gold fell for a second day as Federal Reserve Chairman Ben S. Bernanke refrained from discussing steps to boost the U.S. recovery, while insisting the central bank will act if labor markets don’t improve.

Bernanke, responding to questions from lawmakers today in Washington, said Fed tools include further purchases of assets, such as mortgage-backed securities, reducing the interest rate it pays on reserves banks keep with the Fed, and altering its communications on the outlook for interest rates. Gold surged 70 percent from the end of December 2008 to June 2011 as the central bank kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing. This year, the price is up 1.4 percent.