Gold declined for a second day from the highest level in a month on Wednesday as investors speculate that the Federal Reserve will reduce its bond purchases further, adding pressure on the bullion.
The Yellow metal’s contract for February dropped 0.36% lower to $1,240.50 an ounce on New York’s Comex at the time of writing. While silver futures dropped for the second straight session, trading 0.75% lower at $20.135 an ounce.
Assets in the world’s biggest bullion-backed exchanged-traded fund came in 789.56 tones on Tuesday, dropping to a five-year low.
The US dollar index edged 0.24% higher to 80.858 points at the time of writing.
Stocks in New York advanced on Tuesday, boosted by the US macro data. The market was driven by the upbeat US retail sales report for December, rising 0.2% higher and beating analysts’ forecasts.
Meanwhile, the US businesses’ inventories also reported positive figures, showing a rise of 0.4% higher in November.
In December, the Federal Reserve announced they will cut its monthly bond purchases to $75 billion from $85 billion.
Philadelphia’s Federal Reserve (Fed) President Charles Plosser said he recommend the central bank should end its quantitative easing before late 2014. Plosser also said he forecast the unemployment rate would reach 6.2% by the end of the year.
Charles Plosser supports the Fed’s decision to scale-back its stimulus and commented on the labour marking performing better than expected.
Dallas Fed President Richard Fisher also supported the Fed’s December decision to begin to taper the quantitative easing program and said he would prefer the program scaled-back further by $20 billion.
Members of the Federal Open Market Committee (FOMC) will gather for their next meeting on January 28-29.
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