Gold hangs onto Fed-driven losses

New York (Nov 22)  Gold futures have been trading at a four-month low for the last two trading sessions, pushed by a dollar boost on Wednesday, as markets were closer to believing that a quantitative easing (QE) reduction could come in December or in the coming months.

Prices of the yellow metal traded steady near a low last seen on July 9. Gold was seen down 0.20% at $1,241.30 an ounce at 6:08am EDT.

Silver futures, tracking bullion trading, fell to their lowest since August 8 on Thursday and traded steady below $20.00 an ounce. At the time of writing, silver was seen 0.25% down at $19.885 an ounce.

Holdings in the SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, stood at 856.71 tonnes on Friday.

Sooner tapering?

Wednesday's Federal Open Market Committee (FOMC) meeting minutes revealed broad discussions about the stimulus reduction connected to strong macroeconomic data.

Wording such as "ongoing improvement in labor market conditions [..] would warrant trimming the pace of purchases in coming months," has automatically convinced markets that tapering could come sooner rather than later.

Moreover, St Louis Fed President James Bullard, a FOMC voting member, spurred bullish sentiment on US dollar, hinting that tapering of the asset-purchase program will be 'on the table' at the December meeting.

"It's definitely on the table, but it's going to depend on the data," he said to Bloomberg Television. "A strong jobs report, I think, would increase the probability some for a December taper."