Gold slides under $1,260; caught flatfooted by taper hint

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Gold settled at a one-month low on Wednesday, as minutes of the Federal Reserve's last policy meeting hinted that an unwinding of its bond-buying program could come "within the coming months."

Federal Reserve officials moved no closer to unwinding their monthly asset purchasing program at the October meeting, yet pointed to "coming months" when a tapering could occur. According to minutes from the meeting, Open Markets Committee members looked to economic improvement that "would prove consistent with the Committee's outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months."

The Fed's bond-buying has supported commodities and bullion, and recent hints at a taper has unsettled gold investors.

Chart: Precious Metals

Spot gold dropped by about $31 to $1,244 an ounce, at its lowest since mid-October. for December delivery plunged by $15.50 to settle at $1,258 an ounce, with trading volume already surpassed its 30-day average at 145,000 lots, preliminary Reuters data showed.

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