In advance of the policy making arm of the U.S. Federal Reserve meeting for two days next week, the greenback has been steadily climbing amid prospects that the body is prepared to slash economy-spurring measures. Tapering reduces the amount of dollars in the market, which boosts the value of the monetary unit.
"Selling accelerated after a break below the important support level of $1,250," analyst Eugen Weinberg with Commerzbank told the news source on Tuesday. "The gold market doesn't have too much life of its own, and its price is mostly driven by external factors … the tightening of monetary policy by the Fed is one of the negative factors, and any report on that has an effect on prices."
At 10:28 a.m. on Tuesday, gold futures fell 1.1 percent, a $13.75 loss to $12.40 per troy ounce.
Bloomberg reports a survey of traders and analysts conducted by the London Bullion Market Association indicated the precious metal is likely to hover around $1,219 per troy ounce this year.
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