Gold slides for third day running

Gold has slipped ahead of this afternoon’s Federal Reserve meeting.

Gold is trading at $1339, down 1.1%, as traders are expecting the Fed to reduce its bond-buying scheme this evening. At the moment the US central bank is operating a quantitative easing (QE) scheme of $65 billion per month, and the consensus is that it will be lowered to $55 billion.This could push the US dollar higher and, in turn, drive gold lower. Gold is up 11% year-to-date, so it is no surprise we have seen profit-taking ahead of the meeting.

Gold was around $1330 before the tensions arose in Ukraine, and it approached the $1390 level at the start of the week. The situation in Crimea is far from over, and if military intervention becomes more likely we could see gold rally.

Janet Yellen has not tapered the QE scheme yet during her tenure. If she decides to leave it unchanged, we could see gold head towards the $1350 mark.

Spot gold chart

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