Gold Falls Before Fed Meets as Investors Weigh Stimulus Outlook

by Debarati Roy & Nicholas Larkin, Bloomberg.com  |  published on June 18, 2013

Gold
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.

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