Gold closed at the lowest in three years as traders capitulated after the Federal Reserve said it would begin tapering its monetary stimulus, extending a slide that’s sending the metal to its biggest annual drop since 1981. Goldman Sachs Group Inc. says the declines aren’t over.
Bullion for immediate delivery fell 2.4 percent to close at $1,188.68 at 5 p.m. yesterday in New York, the lowest settlement since Aug. 3, 2010. Prices will drop to $1,050 by the end of next year, Goldman Sachs said Nov. 20.
Gold is heading for the first yearly decline since 2000 after investors lost their faith in precious metals as a store of value. The Fed said Dec. 18 it will cut monthly asset purchases, known as quantitative easing, to $75 billion from $85 billion. U.S. equities jumped to a record. Exchange-traded products backed by bullion lost about $73 billion in value this year, and mining companies wrote down at least $26 billion.
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