Gold futures prices slumped Wednesday and some analysts said it was because of Federal Reserve Board Chairman Paul Volcker's comments on the economy to a House committee.
Heavy selling on the Commodity Exchange in New York caused gold to retreat more than $11 an ounce, with the contract for delivery in February settling at $336.40.
The selling pressure developed "in response to some of Volcker's comments indicating a desire to see more stability in the dollar," said Steve Platt, an analyst in Chicago with Heinold Commodities.
Another analyst, Jack Barbanel of Gruntal & Co. in New York, also attributed the sell-off to Volcker, "saying inflation is under some control."
"He said he and (Treasury Secretary James) Baker are pretty much in agreement on the dollar, oil prices are coming down, the money supply is within parameters he's happy with," Barbanel observed. "So he indicated we're not going to see an upsurge in the near term in inflation."