Gold Drops Below $1218 Before Fed Monetary-Policy Meeting

Gold fell for a second day before the Federal Reserve meets to assess a pledge to keep borrowing costs low for a considerable time and provide guidance on the outlook for monetary policy. Silver, platinum and palladium declined.

Bullion for immediate delivery dropped as much as 0.7 percent to $1,213.52 an ounce and traded at $1,217.14 at 12:02 p.m. in Singapore, according to Bloomberg generic pricing. The metal climbed 2.5 percent last week, the most since the period to Oct. 10, as the dollar declined and global stocks tumbled amid a slump in energy prices.

The Fed meets Dec. 16-17 to debate the pace of raising borrowing costs after holding rates near zero since 2008 to boost growth. Paul Krugman, the economist and 2008 Nobel laureate, said at the weekend that policy makers are unlikely to raise interest rates in 2015 as they struggle to spur inflation amid sluggish global economic growth. Gold remains 1.3 percent higher this year after slumping 28 percent in 2013.


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