Gold price falls after Fed holds

Gold fell below $1,350 an ounce on Wednesday, after a US Federal Reserve decision to keep its stimulus program in place.

In early afternoon trade on the Comex market in New York December gold futures changed hands at $1,338.20 down $7 or 0.5% from yesterday's close, but off sharply from highs near $1,360 an ounce ahead of the Fed announcement.

The Federal Reserve voted 9-1 on Wednesday to continue monthly asset purchases of $85 billion a month, citing an elevated unemployment rate of 7.2% versus the bank's target of 6.5%.

The Fed said it is awaiting more evidence of strength in the US economy and that Washington's economic policies are holding back growth which it characterizes as "moderate" although the jobs situation in the country has experienced "some further improvement."

Expectations vary widely on when the Fed will throttle its asset buying program which is set to top $4 trillion by the end of the year, but few expect it to be this year and some economists only see cutbacks in Spring of next year.

The anemic nature of the US economic recovery bolsters the case for keeping the spigot open with more evidence on Wednesday – private sector hiring coming in under expectations – that more Fed stimulus is needed.