Gold Falls Before Fed Meets as Investors Weigh Stimulus Outlook
Gold declined in New York before the Federal Reserve starts a two-day meeting as investors weighed when the central bank will taper asset purchases.
The Federal Open Market Committee begins its two-day policy meeting tomorrow. Fed Chairman Ben S. Bernanke said last month the central bank, which is buying $85 billion of Treasuries and mortgage securities a month to spur the economy, could scale back stimulus efforts if the employment outlook shows sustainable improvement. Holdings in exchange-traded products backed by gold fell to the lowest since March 2011.
“The markets will be looking for any further clues on the timing of tapering,” Steve Scacalossi, a New York-based vice president at TD Securities Inc., said in a report. “The holdings in ETF continue to fall as investors contemplate better returns in other markets.”
Gold futures for August delivery lost 0.3 percent to settle at $1,383.10 an ounce at 1:41 p.m. on the Comex in New York. Prices have tumbled 17 percent this year as some investors lost faith in the precious metal as a store of value and amid concern that the Fed will slow the pace of stimulus.
Trading volume was 65 percent below the average in the past 100 days for this time of day, according to data compiled by Bloomberg.
Holdings in ETF assets declined the past 18 weeks to 2,116.83 metric tons, the worst run since the first product was listed in 2003.
Silver futures for July delivery dropped 0.9 percent to $21.758 an ounce in New York.
On the New York Mercantile Exchange, platinum futures for July delivery fell 0.9 percent to $1,434.80 an ounce. Palladium futures for September delivery retreated 1.9 percent to $717.85 an ounce.
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