Gold falls 1 per cent on Fed worries; equities steady

New York (Jan 27)   Gold fell around 1 percent on Monday, retreating from a two-month high earlier in the session, as a steadier U.S. equities market and jitters ahead of a key Federal Reserve meeting this week triggered profit taking.

The metal was weighed down by expectations that the Fed could trim monetary stimulus further from the $10 billion-a-month reduction to its bond purchases decided in December. The Federal Open Market Committee is scheduled to begin its two-day policy meeting on Tuesday.

Bullion initially rallied toward $1,280 an ounce after data showed Chinese gold imports from Hong Kong surged to a record high in 2013.

However, the metal tumbled about $25, or 2 percent, from its high in New York afternoon trade after U.S. equities reversed early losses, halting last week's heavy pullback that had benefited gold. The S&P500 index climbed about 0.2 percent.