Gold recovered to some extent on Thursday after having a horrendous day on Wednesday due to signals from the US Federal Reserve that quantitative easing (QE) in the United States could come to end as early as March.
Minutes from the Federal Open Market Committee meeting show that some members of the central bank want to reduce, or even end, the asset-purchase program before the stated goal of 6.5 percent unemployment is reached. Improved economic conditions in the US were cited as the reason for potentially pulling the plug on the program, which injects $85 billion per month into the US economy through the central bank's purchase of Treasury securities and mortgage bonds.
That sent gold reeling to a seven and a half-month low, with spot gold plunging $44.90 to finish at $1,560 on Wednesday. The Fed signal pushed other metals down as well, including
, which lost a buck,
and copper, which hit a 2013 low on Thursday after China said it is considering a property tax to curb a sharp rise in house prices. Global stock markets were also hammered by the Fed news, with investors piling out of equities on the assumption that economic growth could slow without further stimulus measures.
Gold observers were quick to remind investors on Wednesday that gold's trend line is discouraging to say the least, with its 50-day moving average dropping below its 200-day moving average — a technical trading phenomenon known as the “death cross."
Gold's selloff on Wednesday, however, was tempered on Thursday by some short covering and bargain hunting by bullion traders, and that sent the yellow metal climbing in value — though gains were restricted by mounting strength in the US dollar.