Precious metals were up early this morning, helped by dollar weakness ahead of Federal Reserve chairman Ben Bernanke's testimony before Congress on the state of the economy.
In a vivid display of how markets worldwide react instantly to news, the dollar tanked and precious metals and equities got a boost as Bernanke opened his testimony by saying that the Fed's $85 billion a month of bond purchases would continue until solid data indicated that the economy could stand on its own.
The party for precious metals was short-lived however, as later in his statements Bernanke said that the Fed was concerned about long-term inflation risks connected to continued quantitative easing. Gold promptly dropped $40 and equities swooned, as the dollar index soared over half a point to well over 84.
At noon New York time, gold has recovered to be basically even with yesterday's New York close, the stock market has recovered, and the dollar has kept its gains for the day.
The next bit of drama today will be the release of the minutes of the FOMC's May 1 meeting. Analysts are eagerly awaiting the information, to see how the fight between monetary doves and hawks over quantitative easing had progressed.