Gold dropped after the Federal Reserve reduced its forecast for unemployment and refrained from providing more stimulus measures at the conclusion of a two-day meeting today, easing concern that inflation will accelerate.
“The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually,” the Federal Open Market Committee said in a statement in Washington. Officials forecast the unemployment rate would average 7.8 percent to 8 percent in the final three months of this year versus a forecast of 8.2 percent to 8.5 percent in January, according to central tendency estimates.
“There is no suggestion of any easing coming in, and that is not great for gold,” Michael Gayed, the chief investment strategist who helps oversee $150 million at New York-based Pension Partners LLC, said in a telephone interview.
Gold futures for June delivery slid less than 0.1 percent at $1,643.20 an ounce in electronic trading, after settling 0.1 percent lower at $1,642.30 an ounce in floor trading on the Comex in New York. Earlier, it fell as much as 1.1 percent.
“The dollar’s weakness is supporting gold on the lower side,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview.
The dollar fell as much as 0.3 percent against a basket of currencies.
Prices have gained 4.8 percent this year as Europe’s debt crisis boosted demand for a haven. Bullion surged 70 percent from the end of December 2008 through June as the Fed held borrowing costs at a record low and bought $2.3 trillion in housing and government debt during two rounds of so-called quantitative easing.
Silver futures for July delivery declined 1.3 percent to settle at $30.425 an ounce on the Comex. Earlier, it slumped to $29.99, the lowest since Jan. 18.
On the New York Mercantile Exchange, palladium and palladium retreated for the third straight day. Palladium futures for June delivery dropped 1.6 percent to $655.10 an ounce, the biggest fall since April 4. Platinum futures for July delivery slipped 0.1 percent to $1,547.30.20 an ounce.