This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Prices Tumble After Fed Taper Decision (Update 1)

Updated from 10:56 a.m. ET with settlement prices and the Fed's taper decision

NEW YORK (TheStreet) -- Gold prices tumbled Wednesday after the Federal Reserve's latest policy statement signaled a decision to scale back monetary stimulus.

Gold for February delivery at the COMEX division of the New York Mercantile Exchange was falling $17.80 to $1,217.20 an ounce in electronic trading. The gold price traded as high as $1,244 and as low as $1,215.20 an ounce, while the spot price was off $14.62, or 1.2%.

The Fed decided to cut its open-ended monthly asset purchases to $75 billion from $85 billion. The so-called tapering included $5 billion less in mortgage-backed securities, and $5 billion less in longer-term Treasuries.

The Fed had been purchasing $85 billion in mortgage-backed securities and longer term Treasuries every month for a year in an unprecedented policy that won't end until the central bank says so. With weeks of better-than-expected U.S. economic data, economists and analysts squabbled whether it was enough to trigger a taper.

"Our view for several months is largely this has been priced in [the gold market]," said Will Rhind, managing director of investment at the World Gold Council, said in a phone interview from New York. "A majority of this move has already been priced in."

Silver prices for March delivery were sliding 34 cents to $19.72 an ounce, while the U.S. dollar index was jumping 0.61% to $80.53. A strengthening in the dollar also likely was pushing gold prices down as the yellow metal in dollar-denominated terms becomes more expensive for investors.

Gold mining stocks closed mostly in negative territory on Wednesday. Shares of Kinross Gold  (KGC) fell 2.2% to $4.50, while shares of Newmont Mining  (NEM) slightly gained 0.13% to $23.14.

Gold ETF SPDR Gold Trust (GLD) dropped 0.88% to $117.61, while iShares Gold Trust (IAU) declined 0.76% to $11.84.

-- Written by Joe Deaux in New York.

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
GLD $115.60 -0.08%
IAU $11.65 -0.09%
ABX $12.29 -1.21%
AAPL $132.54 0.88%
FB $80.54 0.07%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs