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Gold steadies despite Fed concerns

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Gold moved higher after yesterday’s hammering, but the mood remained cautious following the US Federal Reserve’s comments over monetary easing. 

Spot gold rose US$7.30 to US$1,571.63, but this barely made a dent in the falls seen yesterday when gold had its largest drop in a year. 

Minutes from Federal Reserve’s latest meeting on interest rates showed growing concerns over the US$85bn per month bond purchase programme and a promise to review it next month.

Gold has been buoyed by the prospect of sustained monetary easing by the US Fed and other world governments.

The end of last year saw the first hints from the Fed that it might be have doubts on its policy, which added to the strong performance of equity markets, has pulled the rug from under the gold price in 2013.

Rumours of a hedge fund liquidating its position added to the unease yesterday.

Holdings of SPDR Gold Trust, the world's largest gold ETF, fell to their lowest in more than five months yesterday.

Gold was not the only sufferer, platinum and its associated metals also took a tumble as investors unwound speculative positions that had seen the price of platinum climb sharply in recent weeks.

Spot platinum continued to fall today, shedding US$38 to US$1,604.

Silver edged higher to US$28.65.

Major movers

Randgold Resources (LON:RRS) down 80p at 5,430p

African Barrick Gold (LON:ABG) down 9.5p at 270.3p

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