Gold drops to 7-month low

Gold tumbled to the lowest level in seven months as a result of a stronger dollar after the Federal Reserve released minutes of the policy meeting held last month.

The minutes showed that the Fed’s FOMC (Federal Open Market Committee) signalled that the current asset purchase program may be slowed down or even end soon.

The current quantitative easing measures include $85 billion a month of bond purchases, which the FOMC says could pose risks if continued.

Several FOMC members “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved.”

Gold slid  $20 soon after the FOMC minutes in last New York trading on Wednesday. Gold prices fell lower in the Asian session today and touched a low of $1,554, the lowest levels since July last year. Gold and dollar usually have an inverse price relationship.

Other commodities as well as oil fell to multi-week levels as a result of the Federal Reserve minutes.

Crude oil fell 0.8 percent to $94.42 a barrel, copper declined 0.6 percent to $7,910 a metric ton and soybeans lost 0.7 percent to $14.58 a bushel.

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