Gold markets have slumped this week as investors obsess over the Federal Reserve’s reduction in, or tapering of, asset purchases, a move expected during its September meeting early next week.
“Gold market participants are currently fixated on the fast-approaching FOMC [Federal Open Market Committee] meeting,” wrote UBS AG (VTX:UBSN) gold analyst Joni Teves in a note on Friday.
“The nearly 6% decline in gold prices this week is not only reflective of the unwinding of Middle East safe-haven bids, but also increasing positioning ahead of an anticipated Fed-tapering announcement,” she said.
Gold future contracts fell at the sharpest pace in nine weeks, reported Bloomberg, after recent strong economic data increased the likelihood of tapering this month. ...