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PRECIOUS-Gold drops as Fed statement offers few surprises

2:34 p.m. EDT (1834 GMT), having earlier risen as much as 1.2
Wednesday, 30 Oct 2013 | 2:57 PM ET

* Fed to keep $85 billion bond-buying stimulus

* FOMC's comment on economic expansion, low inflation weigh

* US dollar up, Treasuries prices fall

* Coming up: U.S. weekly jobless claims, Chicago PMI Thursday

(Adds trader comment, second byline, dateline, updates market activity) NEW YORK/LONDON, Oct 30 (Reuters) - Gold fell in choppy trade on Wednesday, erasing earlier gains, as investors took profits after the Federal Reserve said it will keep its bond-buying stimulus and offered few surprises. In its October policy statement, the U.S. central bank said it will keep buying $85 billion in bonds per month for the time being, as Fed officials nodded to a weaker growth outlook due in part to a fiscal fight in Washington that shuttered much of the government for 16 days earlier this month. "The expectation of Fed tapering further down the road has already been factored into the gold market, and its comment about moderate growth and no inflation triggered some selling," said Frank McGhee, head precious metals dealer at Chicago commodities brokerage Alliance Financial LLC. The Fed's comments about the U.S. economy continued to expand at a moderate pace and lower-than-expected inflation weighed down on gold, traders said. U.S. Treasury prices and the S&P 500 equities index also fell, while the U.S. dollar rose against a basket of major currencies. Spot gold was down 0.2 percent to $1,340.84 an ounce percent to a session high of $1,359.60. U.S. gold futures for December delivery settled up$3.80 an ounce at $1,349.30 prior to the Fed announcement. The Fed shocked financial markets last month by opting not to scale back its bond buying, after allowing a perception to harden over the summer that it was ready to start easing off on stimulus. Its caution has since been vindicated. Gold surged more than 4 percent when the Fed Open Market Committee released its previous policy statement on Sept. 18. Silver outperformed gold, edging up 0.2 percent to $22.56 an ounce, having hit a one-month high of $23.06 earlier on Wednesday. Platinum rose 0.3 percent to $1,464.74 an ounce, while palladium eased 3 cents to $743.97 an ounce.

2:34 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold DEC 1349.30 3.80 0.3 1334.50 1359.60 139,319 US Silver DEC 22.983 0.491 2.2 22.390 23.095 47,786 US Plat JAN 1479.90 18.00 1.2 1450.20 1481.30 10,275 US Pall DEC 749.50 2.45 0.3 743.00 752.00 4,033 Gold 1340.84 -2.85 -0.2 1334.95 1359.16 Silver 22.560 0.040 0.2 22.360 23.060 Platinum 1464.74 4.74 0.3 1456.00 1478.00 Palladium 743.97 -0.03 0.0 744.98 749.50 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 147,823 157,113 188,177 20.82 0.56 US Silver 49,408 42,630 55,666 29.32 -0.70 US Platinum 10,416 13,823 12,881 18.36 0.00 US Palladium 4,221 4,077 5,665

(Additional reporting by A. Ananthalakshmi in Singapore; editing by David Evans, Keiron Henderson and Nick Zieminski)