Gold futures extended losses on Thursday, dragged by speculation that the Federal Reserve (Fed) might begin to taper on its monthly asset-purchasing program at its next meeting scheduled for December 17-18. Bullion found support at $1,250 an ounce.
Yellow metal futures dropped 0.37% lower, trading at $1,252.60 per ounce as of 6:42am GMT, up 2% this week with a weekly high of $1,267.50 from Tuesday, its highest price since November 20. Meanwhile, silver futures edged 0.55% lower at $20.245 per ounce at the same time.
Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, dropped more than 2 tones on Wednesday to 833.60 tones.
With the prices of gold is being directly connected to the developments from the US labour market, data on the US jobless figures is expected to be released later today and could shed more light on the valuation of the yellow metal after the Federal Reserve’s meeting.
Gold Futures – Federal Reserve Meeting
According to analysts, the recent US budget deal could bring the Federal Reserve closer to tapering its bond-buying program, while some analysts are still predicting tapering could begin March next year.
“The gold market will probably mark time until next week’s FOMC meeting,” Howard Wen, an analyst at HSBC Securities, stated in a note. “Bullion market’s focus may shift to the upcoming release of retail sales data and initial jobless claims data. Political compromise on the budget issue removes some uncertainty and reduces risk premiums in the markets and is therefore a negative for gold.”
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