Gold prices fell the most in three weeks as the Federal Reserve ended its bond-purchase program, cutting demand for the metal as hedge against inflation. The Fed maintained its pledge to keep interest rates near zero percent for a “considerable time,” while citing improvements for the American labor market as it ended its asset buying at the conclusion of its two-day policy meeting today.
“People will not see the need for gold in an environment of low inflation and solid job growth,” Chris Gaffney, the senior market strategist at EverBank Wealth Management in St. Louis, said in a telephone interview. “While it was expected, the ending of the asset-purchase program added to the negative sentiment.”
Bullion fell to this year’s low on Oct. 6 amid waning demand for a store of value. Holdings in global exchange-traded products backed by gold are at the lowest in five years, and measures of volatility for the metal have pared recent gains. The U.S. economy isn’t in danger of a major pullback even as Europe languishes and China’s growth slows, Treasury Secretary Jacob J. Lew said today.