by Jan Skoyles, TheRealAsset.co.uk
Yesterday the spot gold price hit a three-week low, ending the day solidly lower and below $1,300. This was thanks to yet another Fed President wading in with his speculative comments on what the Fed may or may not do. The drop was gold’s sixth consecutive decline.
Atlanta Fed President Fred Lockhart said the FOMC may decide to start tapering at some point this year. Meanwhile Chicago Fed President Charles Evans said this was ‘quite likely’ and would happen “starting later this year.” A reduction in the US’s trade deficit is also likely to have put pressure on the gold price as markets view the result as signs of an economic recovery.
Lockhart’s comments are the latest in a series from both Fed and FOMC members who continue to talk up both sides of the QE tapering debate. Last week the Fed confirmed that it would maintain bond purchases whilst inflation remained so low, but this week’s comments from both Dallas and Atlanta Fed Presidents suggests that all hints should be taken with a pinch of salt.
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