Silver futures tracked the losses of bullion, which had pushed to their top level in about 90 days late last month when a U.S. airstrike against Syria appeared imminent. The Middle Eastern nation is under scrutiny for its alleged use of sarin gas August 21 against its own citizens near Damascus. The U.S. Federal Reserve is preparing to convene two days of meetings next Tuesday and Wednesday, when discussion about the country's economy-spurring monetary stimulus measures are likely to ensue.
The precious metal has lost roughly 19 percent of its value thus far this year. With a bit more than three-and-a-half months remaining in 2013, its streak of yearly gains is in peril at 12.
"Due to the fading of geopolitical tensions, gold prices are expected to decline," states a Tuesday report authored by analysts with Karvy Comtrade Ltd. in Hyderabad, India, according to Bloomberg. "A tapering of quantitative easing by the Fed is also a concern. Gold prices might remain under pressure."
At 10 a.m. on Tuesday, gold futures dropped 2.04 percent, a $28.36 loss to $1,358.61 per troy ounce. Silver futures fell 3.44 percent, an 0.0082-cent slide to $22.90 per troy ounce.
Gold tracks oil
The yellowish metal tracked the downward dive of crude oil futures, according to Reuters. Both commodities were tugged down by Russia stating it is open to working with Syria to place Syria's arsenal of weapons under international jurisdiction. Bullion's performance on Tuesday also was harmed by equities growing stronger, which damaged the allure of gold.
"Some traders are putting orders as the government has clarified import rules and prices are also falling. But some jewelers are waiting for more correction in prices," a Mumbai-based dealer with a private bank told Reuters on Tuesday.
Obama chimes in
MarketWatch reports U.S. president Barack Obama, who has been leading the charge to hold Syria accountable for the alleged use of gas weaponry on August 21, would not say he is confident that the U.S. Congress will grant approval to strike Syria.
But the U.S. president did note that Syria agreeing to surrender its supply of weapons would mark a good first step. For that reason, the president said he would hold off on ordering airstrikes against the Middle Eastern nation.
Goldseek reports dealers and analysts are following Syrian developments very closely.
"New headlines about Syria remain the focus," states a note released by one gold-dealing desk, according to the news source.
An investment house noted that gold futures and the energy commodity were closely linked on commodity markets on Tuesday.
"The decline in the oil price is adding additional short-term resistance to gold," the commodity team with Standard Bank said, the news source reports.
Origin of the pact
The idea of having Syria give up its arsenal derived from a casual remark uttered on Monday by U.S. Secretary of State John F. Kerry on which foreign minister Sergei Lavrov with Russia capitalized. Since then, discussions have included the idea of having United Nations inspectors assume control over Syria's arsenal of chemical weaponry.
France, which originally was aligned directly beside Britain with the U.S. against Syria, contributed by drafting a resolution to the attention of the U.N. Security Council noting that Syria will suffer the consequences if it does not adhere to the agreement.
The yellowish metal is likely to be impacted by the U.S. Federal Reserve convening two days of meetings next week. Speculation has been high that the body is prepared to slash stimulus measures.
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