Gold further declines following Fed decision
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E-mail Xinhua, June 21, 2012
Gold futures on the COMEX division of the New York Mercantile Exchange extended loss on Wednesday after U.S. Fed announced to keep interest rates unchanged and extend its Operation Twist till the end of the year.
The most active gold contract for August delivery declined 7.4 U.S. dollars, or 0.5 percent, to settle at 1,615.8 dollars per ounce.
Gold extended its slide to three days Wednesday, as traders seemed partially let down by the day's release from the U.S. Federal Reserve Bank.
At the conclusion of its June policy meeting Wednesday afternoon, the Fed released a statement confirming the central bank would extend its so-called Operation Twist program - in which the Fed transitions its Treasury portfolio from short term securities to long term securities - through the end of the year.
According to the Fed, Operation Twist "should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative."
Market analysts said the decision has disappointed investors who had expected earlier a stronger stimulus measure, and weighed on market sentiment.
Additionally, much of gold's rally last week was based on expectations that the Fed would extend Operation Twist, and some analysts therefore held that the Fed statement had already priced into the gold contract.
Also putting pressure on gold Wednesday was a stronger dollar, as well as weakness in crude oil.
Silver for July delivery edged up 2.1 cents, or 0.07 percent, to 28.389 dollars per ounce. Platinum for July delivery fell 13.7 dollars, or 0.93 percent, to 1,466.8 dollars per ounce.
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