MADRID (MarketWatch) — The announcement of the Federal Reserve’s January tapering plans sent gold prices on a volatile ride that saw the front-month contract push into positive territory before giving it all back, plunging on Thursday to levels not seen since June.
Continuing selling from Asia, gold for February delivery (CNS:GCG4) tumbled $32.60, or 2.6%, at $1,202.10 an ounce in the early hours of Europe trading. The contract hit a low of $1,198 an ounce, trading under that key $1,200 level for the first time since June. March silver (CNS:SIH4) was hit even harder, down 78 cents, or 3.9%, to $19.28 an ounce.
A day earlier, gold prices settled at $1,235 an ounce on the Comex division of the New York Mercantile Exchange, up $4.90, or 0.4%, before the Fed news.
“Gold is a hedge against mismanagement of currency, and if the Federal Reserve is perceived to be doing a good job, then demand for gold will diminish,” said Atyant Capital Global Opportunities Fund lead portfolio manager Vedant Mimani.
Gold initially weakened late Wednesday after the Fed said it would cut its pace of monthly asset buys to $75 billion from $85 billion. But the unexpectedly early and slight move away from quantitative easing wasn’t enough to cause any meaningful decline, at least in the immediate aftermath.
“Today’s announcement from the Fed is a welcome reflection of improved economic conditions in the U.S.,” said World Gold Council’s William Rhind. “We believe market participants will refocus on the underlying fundamentals of supply and demand, which remain positive.”
Selling picked up elsewhere in metals trading Thursday, with January platinum (NMN
LF4) down $18.40, or 1.4%, to $1,324.20 an ounce, while palladium for March delivery (NMN AH4) shed $2.45, or 0.4%, to $697 an ounce.
High-grade copper (CNS:HGH4) gave up 2 cents, or 0.82%, to $3.29 a pound. http://www.marketwatch.com/story/gold-dips-as...2013-12-18
(0)
(0)
