Precious metals fell early today, with gold hitting a six-month low, Reuters reported. Gold was the hardest hit by the US Federal Reserve’s announcement that the $85-billion monthly bond-buying program will be reduced by $10 billion a month in January.
“Downside risk still exists for gold as the Fed has only just started to taper … and people have become very negative towards the metal because there is no sign of inflation,” Bullman Asset Management manager Nick Bullman told Reuters.
The Fed announcement brought some stability to financial markets after investors had been speculating and worrying about the future of the stimulus program for months.
“In isolation really, metals reacted negatively yesterday to news of the Fed tapering,” BNP Paribas strategist Stephen Briggs told Reuters. “But when you look around … wider financial markets have taken it in their stride really, and so perhaps market thinking this morning [is] the reaction was a bit overdone.”
Spot gold fell to $1,185.10 an ounce today, its lowest level since June. The price later rose slightly, by $7.18, to $1,196.40 an ounce. Gold futures for February delivery also later increased $1.20, to $1,194.70 an ounce.
Silver prices were down $0.02, to $19.22 an ounce. For the year, silver has lost about 37 percent, Investing.com reported. Silver futures for March delivery on the COMEX in New York were up $0.15, to $19.24 an ounce.
Copper futures for March delivery on the COMEX were also up, rising $0.016, to $3.31 a pound. On the London Metal Exchange, benchmark copper prices increased $47, to $7,248 a tonne, Reuters said. Also helping boost copper prices was news that copper inventories have fallen to 382,550 tonnes, the lowest level in 10 months, according to Reuters.
Brent crude oil prices increased this week due to falling US stockpiles. Brent crude rose $0.60, to $110.89 a barrel. The Fed announcement also showed that the US — the world’s largest oil consumer — is seeing economic improvement, Reuters reported.