Gold prices slipped to a three-week low Thursday morning, as the Federal Reserve ended its asset buying program and signaled a possible interest rate hike ahead of market forecasts.
Gold futures for December delivery are down $20.30 or 1.66 percent at $1,204.60 an ounce, after declining to $1,201.60, the lowest level since October 6.
After the two-day monetary policy meeting, the Federal Reserve announced the end of its monthly asset buying program, QE3, yesterday.
The Fed said interest rates may remain around record lows for a “considerable time”, but added that rate hikes may happen sooner than markets expect if the economic recovery continues to gather steam.
The Fed now believes under-utilization of labor resources to be gradually diminishing.
On Wednesday, gold futures ended down $4.50 or 0.4 percent at $1,224.90 an ounce, ahead of the outcome of the U.S. Federal Reserve’s monetary policy meet.
While the dollar’s weakness against major currencies supported gold, a positive trend in global equity markets weighed against it.
Silver for December is down $0.451 or 2.61 percent at $16.813 an ounce. Meanwhile, copper is down $0.036 or 1.17 percent at $3.068 per pound.
Traders are looking ahead to the U.S. Labor Department’s report on jobless claims for the week ended October 25th, due at 8:30 am ET. Economists expect claims to have declined to 280,000 from 283,000 in the previous week.
Around the same time, the Commerce Department will release advance estimate of its third quarter GDP. The consensus estimate calls for 3 percent sequential GDP growth, a slowdown from the 4.6 percent pace in the second quarter.
Markets are also looking ahead to Janet Yellen’s speech at the diversity conference at Fed in Washington DC at 9 am ET.
Meanwhile, survey results from European Commission show eurozone economic confidence to have picked up in October from a 10-month low. The economic confidence index rose unexpectedly to 100.7 in October from 99.9 in the prior month. The score was expected to fall to 99.7.
The material has been provided by InstaForex Company – www.instaforex.com