NEW YORK (AP) â¿¿ Gold prices slumped Wednesday on speculation that Federal Reserve officials could start pulling back on support for the economy before the year is out.
Minutes from the Fed's meeting last month showed that some central bank officials want to end the Fed's bond-buying program relatively soon, saying the costs could eventually outweigh the benefits. The Fed's stimulus effort has kept interest rates low and driven traders into precious metals like gold.
The news helped push gold prices down 1.8 percent. Contracts for June delivery fell $27.90 to settle at $1,558.80 per ounce.
Reports that Cyprus will sell more than $500 million in gold added to the selling pressure, said James Steel, chief commodities analyst at HSBC in New York.
Traders often buy gold and other precious metals as protection against inflation. Low interest rates also support gold by making bonds less attractive by comparison. So, if the Fed takes away some of its support, "it's a negative for gold because it increases real interest rates and slows inflation," Steel said.
In other trading, silver for May lost 22.8 cents to $27.653 per ounce. Industrial metals also fell. Copper for May delivery dropped 2.35 cents to $3.418 per pound.
Platinum lost more than 1 percent. The July contract sank $23.30 to $1,529.80 per ounce. Palladium for June fell $12.15 to settle at $720.85.
Prices for key crops were mixed. Wheat and soybeans dropped, while corn edged up.
Wheat fell 12 cents to $6.9675 per bushel. Soybeans slipped 2.75 cents to $13.9275.
Corn rose 4.75 cents to $6.49.
In the market for oil and gas, crude oil edged higher, but gasoline futures sank after a report showed that demand for fuel in the U.S. remains relatively weak.
Benchmark crude for May delivery rose 44 cents at $94.64 a barrel in New York. Wholesale gasoline prices dropped 8 cents, or 2.6 percent, to end at $2.87 a gallon.