Gold futures slumped to a seven-week low after the Federal Reserve refrained from taking new actions to boost growth.
Most U.S. stocks fell and the dollar extended gains against the euro after the Fed took no additional monetary policy steps to stimulate the U.S. economy. The central bank said the U.S. is “expanding moderately, notwithstanding some apparent slowing in global growth.”
“There were no substantial changes to the policies and, hence, nothing to boost gold,” William O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “The cautious statements from Fed will continue to push investors towards risk-off trade.”
Gold futures for February delivery dropped 2 percent to $1,635.50 an ounce at 3:24 p.m. in electronic trading on the Comex in New York. At the close of floor trading, the price was down 0.3 percent to settle at $1,663.10. The metal touched $1,634 today, the lowest since Oct. 21.
Imports by India, the world’s largest gold consumer, may decline as much as 16 percent from a record as the rupee’s plunge to an all-time low boosts local prices, according to the Bombay Bullion Association. Purchases may fall as low as 800 tons this year from 958 tons in 2010, Prithviraj Kothari, the group’s president, said yesterday.
Silver dropped after the Fed statement, erasing earlier gains. Futures for March delivery lost 1.2 percent to $30.62 an ounce. At the close of floor trading, the metal rose 0.8 percent to settle at $31.26 an ounce.