Gold Drops on Risk Fed Will Curb Stimulus as Investors Sell ETFs

Gold fell the most in two weeks as the Federal Reserve signaled it is ready to curb a bond-buying program as needed and inflation remained in check, eroding demand for the precious metal as a hedge.

The Federal Open Market Committee said in a statement it is “prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes.” Exchange-traded funds backed by gold plunged 174 metric tons last month, the biggest drop on record, according to data compiled by Bloomberg. Equity and commodity markets fell after a report showed China’s manufacturing expanded at a weaker pace in April.