Gold was hit again ahead of the conclusion of the latest US Federal Reserve meeting, despite the uncertainty over the situation in Ukraine.
Spot gold started to fall back yesterday after a speech by Russian president Vladimir Putin that suggested annexing other parts of Ukraine as not his aim.
Western commentators greeted the comments with scepticism, but the metal eased back nonetheless. Concerns the situation in the country could escalate into a war situation had sparked some concerted buying recently.
Commerzbank suggested the market was provisionally pricing out the Crimean crisis and the resulting higher risk appetite among market players was one reason for the sharp dip in gold.
Having reached US$1,380 last week, the price was trading US$17 lower at US$1,338 shortly after the US equity markets opened for trading.
Today’s meeting of the Fed is the first chaired by Janet Yellen and is widely expected to result in another US$10bn cut in the monthly bond buying programme. The current spend is running at US$65bn per month.
What the Fed chair says about the impact of the weather on the US economy will also be watched for clues on whether tapering even may be speeded up.
Gold has been a beneficiary of the monetary stimulus policies pursued by the US Fed and other governments since the financial crash of 2008 and concerns over the impact of its being reduced hit the price hard last year.
Elsewhere, silver was off slightly at US$20.68 while platinum shed US$8 to US$1,448.
Major movers
Randgold Resources down 68p at 4,816p
Fresnillo down 5p at 875p
Anglo American down 75p at 1,392p.