PR: Gold drops as US dollar rallies after FOMC minutes
The price of gold shed more than US$20 per ounce today after minutes from the June meeting of the Federal Open Market Committee (FOMC) boosted the US dollar, which has an inverse relationship with the yellow metal.
The minutes showed there was disagreement over whether current economic conditions warranted a third round of quantitative easing (QE3), which is supported by only a few policymakers.
It was speculated that the Fed could soon launch QE3 after non-farm payrolls data from the Department of Labor revealed that the US economy created 69,000 jobs in May.
The June report, which was released after the FOMC meeting, showed that payrolls increased by only 80,000 in June, while the May estimate was revised up to a gain of 77,000.
Further stimulus from the Fed would weaken the US dollar, while boosting gold’s appeal as an inflation hedge.
The Fed will hold its next policy meeting at the end of the month.
Gold traded at US$1,555/oz this afternoon, down US$21 from Wednesday’s close. Silver slipped 47 cents to US$26.67/oz and platinum fell US$20 to US$1,405/oz.
Today’s top risers in the sector were:
Chaarat Gold (LON:CGH), up 13 percent at 24.9 pence at midday
Kefi Minerals (LON:KEFI), up 9 percent at 2.84 pence
Archipelago Resources (LON:AR.), up 8 percent at 54 pence
Central Rand Gold (LON:CRND), up 5.5 percent at 0.699 pence
Serabi Gold (LON:SRB), up 3 percent at 6.56 pence
Angel Ming (LON:ANGM), up 2.5 percent at 0.975 pence
The top fallers were:
Patagonia Gold (LON:PGD), down 7 percent at 23 pence at midday
Hambledon Mining (LON:HMB), down 6 percent at 1.57 pence
GoldStone Resources (LON:GRL), down 5 percent at 3.86 pence
Condor Gold (LON:CNR), down 4.5 percent at 91 pence
