Gold falls below $1,300 ahead of Fed
Gold suffered a third day of selling on Wednesday dropping more than $17 to a 6-week low of $1,3291.50 an ounce over rising fears about US economic stimulus.
In midday-trade, just hours before the expected tapering of the Federal Reserves quantitative easing program was due to be announced, the gold price recovered somewhat to $1,298 an ounce.
The gold price seemed to have turned a corner in August, briefly exiting a bear market as it fought back from near 3-year lows, but those gains have now been mostly wiped out.
The US Federal Reserve meeting ends Wednesday at 2:30 EST and consensus is that the Chairman Ben Bernanke will announce a relatively modest $10 billion reduction in the bank’s asset purchases program currently running at $85 billion a month.
The gold price has increased nearly 60% since QE1 was announced in December 2008 when the ruling price was $837 an ounce, but the metal has retreated some $380 in 2013.