NEW YORK (TheStreet ) -- Gold prices were staging a rally, shrugging off an almost three-day selloff, after Ben Bernanke left the door open for more monetary easing..
Gold for December delivery was adding $20.70 to $1,783.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,800 and as low as $1,759.50 while the spot gold price was adding $4.50, according to Kitco's gold index.
Silver prices were down 35 cents at $40.39 an ounce. The U.S. dollar index was up 0.10% at $74.31 while the euro was flat vs. the dollar.
Federal Reserve Chairman, Ben Bernanke, offered no surprises in his speech at Jackson Hole Friday, but he did leave the possibility for further intervention open. Bernanke said the Fed is willing to step in if needed to trigger a stronger recovery, but barely discussed any monetary policy. The Fed's policy meeting in September is now two days instead of one, which indicates stimulus is on the table but whether or not there will be an agreement or policy shift is a different story.
Gold prices were still rallying somewhat, something many experts said were expecting if Bernanke announced more monetary easing. Equity markets appear just as confused vacillating between negative and positive territory.
"It's become an annual ritual to expect Jackson Hole to be a momentous occasion in all of these markets," says Jon Nadler, senior analyst at Kitco.com, when the annual meeting had been nothing short of a boondoggle until last year when Bernanke hinted at quantitative easing round two.
Nadler thinks that Bernanke isn't in a position to pump more money into the system just because some macro data is disappointing and the stock market is suffering. There were also three dissenters at the last Fed meeting in early August who disagreed with keeping interest rates low until mid-2013 because of rising inflation, so printing more money seems like an even farther reach.
Nadler says that any disappointment would lead investors out of stocks and into gold, a trend they are dabbling with this morning, but "if it's an across the board selloff in all types of assets that were predicating their further advances on easy money, if we have a wipeout of that nature, it could be a short term across the board sell signal."
Gold prices have corrected 11% in two-and-a-half days, giving up half of its gains from its two month rally which pushed the metal to an intraday high of $1,917 an ounce. The massive selloff could also be igniting bargain hunters wanting to take advantage of "lower" gold prices.
Nadler, who warned of a 35% correction two weeks ago, still stands by that prediction which would take gold prices to $1,247 an ounce.
Many experts, however, think that gold will trend higher as the macro backdrop has not changed. European governments are still struggling with ballooning debt and trying to save Greece from imploding. Germany is now making headlines with rumors swirling about a possible short selling ban and rating downgrade, both of which were denied. With investors so headline skittish, gold is fulfilling that safe haven role.