Gold drops as Fed refrains from stimulus signals
Gold futures declined for the second straight day as the Federal Reserve failed to provide signals on plans for additional monetary stimulus to bolster the US economy.
The minutes of the Fed's meeting showed policy makers considered the risk that further easing might pose. Some members of the Federal Open Market Committee noted that excessive purchases of Treasuries may “at some point, lead to deterioration in the functioning of the Treasury securities market that could undermine the intended effects of the policy.” A few officials said the central bank will probably need to take further action.
“The money printing machine has not been started, and that damps the reason to hold gold in the short term,” Michael Gayed, the chief investment strategist at New York-based Pension Partners, which advises on more than $US150 million in assets, said in a telephone interview.
Gold futures for August delivery fell 0.5 per cent to $US1572.50 an ounce in electronic trading on the Comex in New York. The price settled earlier at $US1575.70, down 0.3 per cent. Yesterday, the metal declined 0.6 per cent.
Gold for immediate delivery pared gains and was 0.4 per cent higher at $US1572.85. Earlier, the metal rose as much as 1 per cent.
Silver futures for September delivery advanced 0.5 per cent to close at $US27.023 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for October delivery rose 0.1 per cent to settle at $US1,431.60 an ounce. Palladium futures for September delivery gained 1.1 per cent to $US582.95 an ounce.