Reuters reported the drop of 1.1% in the price of gold after no indication of additional action to stimulate growth was given at the Federal Reserve’s most recent meeting.
As quoted in the report:
Wednesday’s minutes showed the Fed was open to buying more Treasury bonds to stimulate the economy but that the recovery might need to weaken for a consensus to build.
Mitsui Precious Metals strategist David Jollie commented:
Most of the price movements recently in gold have been driven by movements in the foreign exchange markets and by macroeconomic issues in general rather than anything too specifically gold-related. At the start of June, enhanced perceptions that QE3 might be launched drove the price up quickly. Near the end of June, lukewarm comments by the FOMC suggested QE3 was further away than some had thought and the price fell back. While the prospects of QE3 taking place on some timescale are still reasonable, this is likely to remain the primary focus of the gold market.