Gold edges lower amid Fed taper bets
New York (Nov 18) Prices of gold extended losses during Monday's trading session, remaining steady below the $1,300 threshold per ounce, as investors continue to speculate over how long the Federal Reserve (Fed) will maintain its bond-buying program in the current form.
Gold futures inched down 0.35%, trading at $1,283.00 per troy ounce at the time of writing, while silver futures fell 0.50%, standing at $20.625 per ounce.
The US dollar index, measuring the strength of the greenback versus a basket of six of its major peers, dropped 0.07%, standing at 80.792 points.
Holdings in the SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, stood at 865.71 tonnes on Friday.
Fed taper talks
Gold has been trading steady below the important $1,300-mark per ounce during recent days, amid speculation about how long the Fed will keep the current pace of its monthly bond-buying program.
On November 14, Fed chairperson nominee Janet Yellen stated she would support the central bank's stimulus measures until the US economy is stronger. The US economy is ''performing far short of potential'', Yellen said, and there is ''more work to'' do on the economic recovery as the unemployment rate remains too high.
Even if Yellen would maintain the bank's bond-buying program in place for another six months or a year, investors will be still focused on when the Fed would start to pare its stimulus, and that would still be negative for the precious metal, analysts say.
Market participants now await the speech from current Fed Chairman Ben Bernanke on Wednesday as well as the minutes from the Fed's October meeting, which are due out at the same day.
Some analysts spurred worries that the bank may start to wind down its asset purchases at its next meeting, scheduled for December 17-18, after signs of improvement in the world's largest economy. The latest data showed that the number of non-farm payrolls rose by 204,000 in October, while the US economic growth rose an annualized 2.8% in the third quarter, beating estimates.
But still, the majority of analysts predict that the US central bank is likely to begin the much talked about tapering at the March meeting.
