Gold declined from a seven-week high after the U.S. central bank damped speculation it would expand stimulus measures and the dollar advanced. Gold for August delivery fell 0.3 percent to $1,548.40 an ounce at 10:17 a.m. in Mumbai. The metal reached $1,559.30 yesterday, the highest for a most-active contract since May 2, when the price reached a record $1,577.40. The immediate- delivery contract was little changed at $1,547.55 an ounce, after earlier falling as much as 0.3 percent. The Federal Reserve said after a two-day meeting that it will maintain record monetary stimulus to support a flagging economic recovery after completing a $600 billion bond-purchase program this month. There was no mention of additional versions of the program, the second round of quantitative easing. “Some elements of the market were expecting that there would be more talk of potential QE3,” said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd. “A softer U.S. interest rate market for longer means gold is more attractive and I guess there’s a little bit of disappointment that wasn’t the case.” The dollar advanced for a second day against the euro, climbing to $1.4306 per euro at 10:19 a.m. in Mumbai from $1.4357 in New York yesterday. Fed Chairman Ben S. Bernanke said at a press conference in Washington that the central bank can take additional actions to stimulate the economy “if conditions warranted.” “That the Fed and Bernanke didn’t really allude to any future QE3 and talked about potential for a rate rise further out, it probably prevented gold from pushing higher and heading towards its record,” Heathcote said. Silver Drops Silver for September delivery dropped 1.3 percent to $36.285 an ounce, while the metal for immediate delivery declined 0.2 percent to $36.275 an ounce. Spot palladium lost 0.3 percent to $762.25 an ounce, and cash platinum fell 0.5 percent to $1,730.90 an ounce. Marc Faber, publisher of the Gloom, Boom & Doom report, said today he still favors gold and silver and will keep accumulating gold, even as prices of the metals may decline in the next three months. “I still like gold and silver,” Faber said in a Bloomberg Television interview from Hong Kong. “They will go down in the next three months or so, but I wouldn’t short them. And I keep on accumulating gold.” To contact the reporters for this story: Phoebe Sedgman in Wellington at psedgman2@bloomberg.net; To contact the editor responsible for this story Madelene Pearson at mpearson1@bloomberg.net

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