Gold prices fell today as traders dumped the yellow metal ahead of today’s policy announcement by the Federal Reserve.
It was reported today that the Fed is unlikely to announce another round of quantitative easing and that policymakers will instead extend the so-called Operation Twist – a programme of selling short term bonds and buying long term securities to keep long term interest rates low.
Chief economist of Goldman Sachs Jan Hatzius said he would be surprised to see no easing. He added that the Fed could reduce its economic growth forecasts and pledge to keep interest rates at low levels beyond 2014.
More stimulus from the Fed would weaken the US dollar, which has an inverse relationship with gold, and lift the yellow metal’s appeal as an inflation hedge.
Gold traded at US$1,603/oz, down US$14 from Tuesday’s close. Other precious metals moved in the same direction as gold with silver dropping 10 cents to US$28.32/oz and platinum falling US$14 to US$1,463/oz.
Today’s top risers in the sector were:
Mariana Resources (LON:MARL), up 16 percent at 6.25 pence at midday
GoldStone Resources (LON:GRL), up 12.5 percent at 4.55 pence
Peninsular Gold (LON:PGL), up 8 percent at 23 pence
Kryso Resources (LON:KYS), up 4.5 percent at 30 pence
Chaarat Gold (LON:CGH), up 4 percent at 16.91 pence
The top fallers were:
Serabi Gold (LON:SRB), down 8 percent at 7 pence at midday
Central Rand Gold (LON:CRND), down 7.5 percent at 0.703 pence
Premier Gold (LON:PGR), down 6.5 percent at 0.35 pence
