Conjecture about the central bank of the U.S. tapering off its economy-spurring monetary easing program pulled down gold futures on Tuesday, according to Bloomberg.
The economy of the U.S., the globe's largest, was upgraded on Monday by credit rating service Standard & Poor's, which boosted the outlook from negative to stable. U.S. Federal Reserve chief Ben Bernanke said last month that the U.S. is prepared to discontinue the easing program if the U.S. economy continues strengthening.
"The S&P statement is reinforcing growing optimism about the strength of the U.S. economy and, consequently, bringing into question the need for the Fed to keep its foot on the accelerator," states a report authored by commodity strategist Marc Ground with Standard Bank Plc in Johannesburg, according to Bloomberg. "With Chinese participants away on holiday, we might not be able to count on the same magnitude of support from the physical market."
At 10:57 a.m. on Tuesday, gold futures dropped 0.9 percent, a $12.47 loss to $1,374.03 per troy ounce.
Reuters reports the yellowish metal dove to its lowest value in three weeks during the Tuesday trading session.
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