Gold hits 4-week low as investors bet on Fed tapering
Gold prices fell nearly 3 percent on Thursday ahead of a Federal Reserve meeting next week at which the central bank is widely expected to announce it is curbing its bullion-friendly monetary stimulus measures.
The Fed is expected to say at a two-day gathering starting on September 17 that it is set to start reining in its $85 billion monthly bond-buying program, possibly triggering new selling pressure on the metal.
Spot gold slid nearly 3 percent to hit its weakest since Aug. 15 at $1,327.40 an ounce, and last stood at $1,331, down 2.6 percent. The metal is on track for its biggest weekly drop since June.
"We've got the Fed meeting next week, and the consensus now is that they will announce, and actually begin, tapering," Societe Generale analyst Robin Bhar said.
"The incoming data has been pretty strong. The jobs data last Friday (missed expectations), but it still showed the unemployment rate falling. (That means) gold is less in favor."
U.S. gold futures for December declined 2.5 percent to $1,330 an ounce.
Selling pressure picked up after the metal broke through its 100-day moving average at $1,355 an ounce and other key levels of support, traders said.
Gold prices have fallen around 19 percent since the Fed signaled it would start reining in monetary stimulus by the end of the year.