Gold Drops As Fed Meeting Starts

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.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza