Gold price drifts lower as Fed continues to Taper
Duncan Richardson, News Editor
1 May 2014, 10:13 a.m.
The gold price fell yesterday following the Federal Reserve’s decision to reduce its monthly asset program known as quantitative easing.
The Fed trimmed its monthly asset purchases by a further $10 billion, its fourth consecutive monthly cut. The decision was widely expected and brings the total amount of easy money pumped into the U.S. system to over $4 trillion.
The announcement was released just hours after official figures confirmed the U.S. economy expanded by just 0.1% in the first quarter.
If the Fed continues to taper at $10 billion a month the Fed will have fully exited its quantitative easing program by the end of the year. The banks quantitative easing program weakens the dollar, increases the risk of inflation and boost gold’s appeal as the ultimate safe haven asset.
Silver decreased 0.1% to $19.182 per ounce, platinum was little changed at $1,425 per ounce and Palladium dropped 0.2% to $809.20 per ounce.