Gold futures fall amid Fed fears
Gold futures fell to the lowest since July as investors weighed speculation that the US Federal Reserve may reduce monthly bond purchases in coming months.
Policymakers expect US economic data will signal further improvement in the labour market and "warrant trimming the pace of purchases in coming months", according to minutes of the Fed's October meeting released earlier this week. Applications for unemployment benefits in the US for the week ended November 16 declined to the lowest in almost two months, the Labour Department said yesterday.
"The market is convinced that the Fed is ready to start tapering," said Sterling Smith, a futures specialist at Citigroup in Chicago.
Gold futures for December delivery tumbled 1.3pc to $1,241.10 (€921.43) an ounce in early trading on the Comex in New York. Trading was 54pc higher than the average for the past 100 days for this time of day.
Expectations that the Fed will trim its $85bn in monthly asset purchases pushed gold toward its first annual drop since 2000. Prices fell 25pc this year through yesterday. (Bloomberg)