Gold slips below $1,200 over stimulus rollback

Precious metal on course to record its biggest drop in more than 30 years

An overview of Barrick Gold Corporation’s Pueblo Viejo gold mine, one of the world’s largest. Photograph: Ricardo Rojas/Reuters

An overview of Barrick Gold Corporation’s Pueblo Viejo gold mine, one of the world’s largest. Photograph: Ricardo Rojas/Reuters

 

Gold slipped back below $1,200 a troy ounce yesterday as investors closed lossmaking positions and continued to fret about the US Federal Reserve’s decision to roll back its bond-buying programme.

In quiet pre-Christmas trading, bullion fell as much as 0.9 per cent to $1,192.54, leaving the precious metal on course to record its biggest drop in more than 30 years.

“On the fundamental side, gold is suffering from the fact that global growth seems to be improving in most (although certainly not all) of the world’s key economies, lessening the need for investors to seek out its safety,” said analysts at INTL FCStone.

Gold dropped 3 per cent last week as the Fed judged the US economy strong enough to scale back its bond-buying programme, taking the first step away from a historic era of monetary stimulus.
– (Copyright The Financial Times Limited 2013)