Precious metals were dipping in value on Tuesday for a second consecutive trade session, according to Bloomberg.
Both gold and silver futures were impacted by an emboldened U.S. dollar and the likelihood of the U.S. Federal Reserve moving forward with tapering economy-spurring monetary stimulus measures. The world's reserve currency, which typically performs the inverse of gold futures, marked a fifth consecutive day of advances against 10 top monetary units.
The Federal Open Market Committee, the policy-making arm of the U.S. Federal Reserve, is slated to release on Wednesday the minutes of its policy meeting from December, when the body resolved to slash monthly asset purchases by $10 billion.
"People want to know how serious the Fed is about easing, and tomorrow more details will come out," head of commodity strategy Bart Melek with TD Securities in Toronto told the news source on Tuesday. "The dollar strength is also working against gold."
At 10:38 a.m. on Tuesday, gold futures slumped 0.97 percent, a $12.07 loss to $1,225.99 per troy ounce. Silver futures dove 2.57 percent, a 52-cent loss to $19.67 per troy ounce.
The shadow of first annual losses in 12 years
The yellowish metal is one week into the aftermath of having marked its first annual losses in 12 years. And those yearly losses were steep. Gold futures plunged 28 percent in 2013.
Investors increasingly shied away from the risky commitment that bullion has become while the U.S. dollar continued strengthening, which was emblematic of the progressive gains made by the U.S. economy, which is recognized as the world's largest.
The dollar's most recent gains are linked with economic data noting the U.S. trade deficit dropped more than projected in November.
During the past five trade sessions, gold futures advanced nearly 4 percent. Losses on Tuesday served as a reminder as to the recovery overseas as well, one analyst said.
"The move lower in gold has to do with what has been happening in the European markets and as a consequence we are seeing demand for safe havens like the Swiss franc falling rapidly," analyst Christin Tuxen with Danske Bank told Reuters on Tuesday.
Trajectory to continue south?
The likelihood is high that gold futures will continue their downward trend as they year continues, according to analysts cited by Reuters. As the economy strengthens, stimulus measures implemented by the U.S. Federal Reserve will continue to be shorn.
When the Fed purchases less debt, the market is filled with fewer dollars. Consequently, the value of the dollar is projected to go up while the yellowish metal would slip.
Factors that prompt the Fed to consider reducing stimulus are economic data, and the nation is preparing to release a labor market report at the end of this week.
"The Federal Open Market Committee minutes tomorrow will be important in setting the direction," the Danske Bank analyst told the publication. "We know that is going to be data-dependent and a decent payrolls report on Friday should accommodate further downside for gold because it will mean that the Fed will cut at least $10 billion from its stimulus at each meeting."
Switzerland suffers steep losses due to gold's dive
The Wall Street Journal reports gold futures' downward dive in 2013 proved to be quite detrimental for Switzerland.
The Swiss National Bank last year lost the equivalent of $16.6 billion as a result of its gold holdings losing value while the price of gold plummeted the most since 1981.
But the nation's steep losses were partially cushioned by the central bank benefiting from foreign currencies.
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