Gold Slides As Fed Hints At Exit Strategy
Washington (Sept 18) Gold prices are lower Thursday morning amid speculation that US rate hikes will be at a faster pace once the Fed begins its monetary tightening.
On Wednesday, the Federal Reserve reduced its monthly asset purchases to USD15 billion , while indicating the program will likely end in October.
It maintained its pledge to keep interest rates at near-zero for a "considerable time" after its bond-buying stimulus program ends.
And although policymakers refrained from offering a more specific time-line for the first interest rate hike, there were hints in the Fed statement that tightening may be less gradual once underway.
The Fed projects a significant drop in unemployment to below 5% by 2017, and said they expect annual inflation to run closer to target levels around 2%.
Gold futures for December are down USD13.30 or 1.08% at USD1,222.60 an ounce, after dropping to an eight-month low of USD1,216.60 an ounce.
On Wednesday, gold futures ended down USD0.80 at USD1,235.90 an ounce.
Silver for December is down USD0.217 or 1.16% at USD18.517 an ounce. Meanwhile, copper is down USD0.11 or 0.34% at USD3.131 per pound.
At 8:30 am ET , the US Labor Department will release its jobless claims report for the week ended September 13 . Economists expect claims to have declined to 305,000 from 315,000 in the previous week.
Around the same time, the Commerce Department will release its housing starts report for August and at 10 am ET , the Philadelphia Federal Reserve is due to release the results of its regional manufacturing survey.