Gold declined from a five-week high in New York as a stronger dollar curbed demand for an alternative investment before Federal Reserve policy makers meet to discuss monetary policy.
The Bloomberg U.S. Dollar Index, a measure against 10 currencies, reached a one-week high as the Fed begins a two-day policy meeting. Bullion futures climbed to $1,361.80 an ounce yesterday, the highest since Sept. 20. Physical demand has been subdued, particularly in China, Standard Bank Group Ltd. said in a report yesterday.
Gold is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value. The 16-day partial U.S. government shutdown that began Oct. 1 probably trimmed 0.25 percentage point from fourth-quarter economic growth, President Barack Obama’s chief economic adviser said. Policy makers will delay cutting debt purchases until March, according to economists surveyed by Bloomberg on Oct. 17-18.
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