Prices shed more than 1% as investors await tomorrow's FOMC rate decision
Precious metals traded lower on Tuesday, 17 December 2013 as investors awaited tomorrow's FOMC rate decision. Gold futures closed with a loss of more than 1% on Tuesday, falling back after a two-session climb as traders continued to await word on the fate of the Federal Reserve's bond-buying program.
Gold for February delivery dropped $14.30, or 1.2%, to settle at $1,230.10 an ounce on the Comex division of the New York Mercantile Exchange.
March silver was hit too, losing 26 cents, or 1.3%, to $19.84 an ounce
The highly anticipated and debated U.S. Federal Reserve Open Market Committee (FOMC) meeting began Tuesday and ends Wednesday afternoon with a statement. A growing number of traders think the Fed will announce a tapering this week. However, there is no clear consensus at all on precisely when the Fed will make its move.
Today's economic data at Wall Street was limited to just a handful of reports. November consumer prices were unchanged while the consensus expected an uptick of 0.1%. Core prices increased 0.2%, above the 0.1% increase expected by the consensus.
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Separately, the current account deficit for the third quarter totaled $94.8 billion, which was narrower than the $101.0 billion deficit that had been broadly anticipated. Lastly, the December NAHB Housing Market Index rose to 58 from 54 while the consensus expected the reading to tick up to 55.
In overnight news, reports in the Euro zone showed inflation remains extremely low and almost to the point of being problematic. European Union consumer prices fell in November, while the overall inflation rate inched up to 0.9%, on an annual basis. In the U.K. the rate of inflation in November fell to its lowest level in four years, at 2.1% on an annual basis.
The important German ZEW economic expectations survey was released Tuesday and handily beat expectations. The December reading was 62.0 versus 54.6 in November. A level of 55.0 was expected. Germany is the economic work horse of the European Union.
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