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Gold was hammered in the markets today, losing over $40, after the US Federal Reserve indicated that changes to its quantitative easing program are contemplated for March.
Gold was hammered in the markets today, losing over $40, after the US Federal Reserve indicated that changes to its quantitative easing program are contemplated for March.
Minutes from the Federal Open Market Committee (FOMC) meeting showed that some members of the central bank want to reduce, or even end, bond purchases before the stated goal of 6.5% unemployment is reached.
That sent gold reeling to a seven and a half-month low. COMEX gold for April delivery last traded down $43.50 at $1,560.90 an ounce, while spot gold finished down $44.90 at $1,560.50. Silver futures were also down by a buck, last trading at $28.40 an ounce.
Improved economic conditions in the world’s biggest economy was cited by the FOMC as the reason for a possible end to quantitative easing (QE) — which has become a euphemism for printing money. QE began in December 2008 and has gone through three rounds, the latest involving the purchase every month of some $85 billion worth of treasuries and mortgage bonds.
The program due to its inflationary implications has been a veritable boon for gold, which has doubled in value from $837 an ounce in December 2008 to the current price in the mid-$1500s.
Further evidence of a bearish turn for gold came from the gold futures market, which on Wednesday saw the 50-day moving average for April gold fall below the 200-day moving average, which is a phenomenon known as the “death cross”.