Spot Gold Extends Drop as Fed Meeting Minutes Fuel Rate Concernsby
Gold for immediate delivery extended declines after most Federal Reserve policy makers in April said an interest-rate increase would be appropriate in June if the economy continued to improve.
“Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen and inflation making progress toward the committee’s 2 percent objective, then it likely would be appropriate for the committee to increase the target range for the federal funds rate in June,” according to minutes of the Federal Open Market Committee’s April 26-27 meeting released Wednesday.
Bullion is up 19 percent this year amid speculation that fragile global economic growth would restrain the pace of interest-rate increases, boosting demand for the metal as a store of value. Gold has slipped this month amid signs of an improving U.S. expansion and indications that inflation may be picking up toward the Fed’s goal.
Gold for immediate delivery fell 1 percent to $1,266.48 an ounce at 2:05 p.m. New York time.