Investors closely monitored the spoken words of Ben Bernanke, chairman of the U.S. Federal Reserve, who verified the $600 billion asset-purchasing program will finish at the end of the month. The second phase of quantitative easing, also known as QE2, will not turn into a third phase, as much speculation pondered.
ForexPros reports the dollar gained in value as a result of the bond-buying program coming to a close. Consequently, gold futures are led to decline as the two usually perform the inverse of one another.
At 8:57 a.m. on Thursday, gold futures slipped 1.87 percent, a $29 drop to $1,524.40 per troy ounce.
Additional Fed activity to impact the price of gold is, in this case, inactivity as the central bank declined to raise the interest rate from 0.25 percent, which is a historic low. The European Central Bank recently raised its rates, which particularly underscored the decision from the Fed.
Bernanke said changes in monetary policy are at minimum two Fed meetings away.
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