Gold fell a second day, trimming a monthly rise, as investors assessed the outlook for further cuts to the U.S. stimulus program against the Ukraine crisis.
European shares rose with U.S. index futures before the Federal Reserve begins a two-day policy meeting. Gold declined from the highest price in almost two weeks yesterday after the U.S. and the European Union announced new sanctions on Russia.
The U.S. sanctions “were once again nothing but a slap on the wrist,” Naeem Aslam, chief market analyst at Ava Capital Markets Ltd. in Dublin, said in a report today. “For now, risk trade is back on. Gold is under pressure once again as the rewards are bigger for traders to invest that money in the equity markets, rather than keep shining the yellow metal.”
Gold for June delivery fell 0.1 percent to $1,297.70 an ounce by 12 p.m. on the Comex in New York, on trading volumes that were 24 percent lower than the average for the past 100 days for this time of day. Futures rose 1.1 percent this month after dropping 2.9 percent in March.
The Fed will probably trim its monthly asset purchases by another $10 billion to $45 billion at the meeting starting today, a Bloomberg News poll found. Reports tomorrow may show the U.S. economy grew 1.2 percent in the first quarter, while employers added 210,000 jobs in April, according to economists surveyed by Bloomberg.
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