(Bloomberg) – Gold dropped in New York, backing up from a weekly gain, as a rally after the Federal Reserve’s decision to hold stimulus limited physical demand and as data showed signs the U.S. economy is improving.
Bullion futures increased by4.5% on September 18 after the Fed said it wants more evidence of an economic improvement before tapering its $85 billion-a-month of bond buying. Economists surveyed by Bloomberg estimated Fed policy makers to taper monthly Treasury purchases by $5 billion after this week’s meeting.
Gold dropped 19% this year as several investors lost trust in the yellow metal as a store of value on confidence economies are firming. Reports released yesterday displayed sales of before was owned U.S. homes surprisingly increased in August to the highest in more than six years and manufacturing in the Philadelphia region extended in September at the fastest jump since March 2011. Holdings in gold-backed funds are at the lowest in three years. (Data by Bloomberg)
Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) SA in Geneva, said today in a phone interview “Physical demand has really slowed” after prices climbed, he also added “There will be quantitative-easing tapering at some point.”
December gold dropped 0.9% to reach $1,357.50 an ounce by 7:45 a.m. on the Comex in New York. Prices increased 3.7% this week. Futures trading volume was under its average by 20% for the past 100 days until now. (Bloomberg data) Gold for immediate delivery in London fell by 0.6% to reach $1,358.03.