Updated from 10:47 a.m. ET with settlement prices
NEW YORK (TheStreet) -- Gold prices slipped on Tuesday as traders continued to fear the Federal Reserve will slow its economic stimulus program in the coming months.
Worries carried over into Tuesday's trading session on strong November manufacturing activity reported on Monday that led to a more than $20 tumble in gold prices as markets bet the Fed would soon curb its monetary stimulus -- action by the central bank that many market participants have made gold an appeal asset class to hedge against possible inflation.
Gold for February delivery at the COMEX division of the New York Mercantile Exchange declined $1.10 to settle at $1,220.80 an ounce. The gold price traded as high as $1,225.80 and as low as $1,214.60 an ounce, while the spot price was down 45 cents.
"The expectation that the Fed is one step closer to tapering it's bond-buying program continues to keep pressure on the metals complex, in addition to that we continue to see lack luster physical demand," David Meger, director of metals trading at Vision, said in a phone interview. "And really the combination of those two is allowing prices to slide over the last several sessions."Sentiment toward physical gold slipped last month, the worst performance by percentage for a November trading period since 1978, as investors continue to rotate into stocks, according to BullionVault's gold investor index. The index for November dropped to 54, down from 54.3 in October. A reading above 50 suggests there are more buyers than sellers in the market. "We're seeing a lot of pressure on the wholesale side because people are shorting the market, and the fast money is going into where the money is to be made, which is the stock market," Miguel Perez-Santalla, vice president of BullionVault, said in a phone interview from New York. Perez-Santalla said retail investors continue to add support to the physical market, which has suffered in 2013 from selling by large institutional investors. Silver prices for March delivery fell 22 cents to $19.06, while the U.S. dollar index was dropping 0.38% to $80.60. Gold mining stocks were mixed on Tuesday. Shares of Randgold Resrouces (GOLD) were slumping 2.4% to $65.69, while shares of NovaGold Resources (NG) were adding 1.2% to $2.23. Among volume leaders, Barrick Gold (ABX) was slipping a cent to $15.53. Gold ETF SPDR Gold Trust (GLD) was tacking on 0.29% to $117.92, while iShares Gold Trust (IAU) was gaining 3 cents to $11.85. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV