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Reuters, April 9 2014

Gold steadied on Wednesday ahead of the release of minutes of the U.S. Federal Reserve's latest policy meeting, as a firmer dollar and fresh outflows from bullion-backed funds offset support from concerns over tensions in Ukraine.

LONDON: Gold prices hit three-week lows on Thursday after posting its biggest one-day fall since late January in the previous session, reacting to comments from Federal Reserve head Janet Yellen suggesting US interest rates could rise sooner than expected.

The dollar rose sharply, stocks fell and short-term US bond yields jumped by the most in almost three years after Yellen said the bank may end its bond-buying programme this autumn, and could start to raise interest rates around six mont ..

It was a choppy end to 2013 as metals saw a broad based decline over the year of 28%. Precious metals have succumbed to selling pressure as Exchange Traded Funds (ETF) holders liquidated in favour of equities.  ETF holdings have fallen back to levels last seen in 2008 before the global crisis. Investors lost faith in the metal as a store of value as equities rallied and an economic recovery prompted the Federal Reserve to pare its $85 billion in monthly bond. Gold fell to a year low of $1182, before recovering slightly to traded and close the year at $1202.

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After a 18 day delay the much anticipated U.S non-farm payrolls and unemployment number was released this morning. It was a mixed bag. September non-farm payrolls grew by 148,000, well below the 182,000 forecast. The August number was revised upwards to 193,000 from 169,000. The unemployment rate came in at 7.2 percent.

It was another wild week for the precious metals market after a 11th hour deal over the debt ceiling Gold put in a knee jerk reaction jumping $40 in overnight trade Wednesday. The metal touched a low of $1276, before turning on short covering and touching a high of $1321 Thursday in the North American session.

The precious metals market has remained in a "sell off" mode despite the U.S government shut down and the looming debt ceiling debate. The metals have been bearish all week with the dollar index rising.

What the world was waiting for never happened. The release of the Federal open market committe minutes shocked traders. On Wednesday, the Fed declined to start the unwinding of its monetary easing measures with traders expecting $10 billion cut. The news sent shock waves throughout the market as gold spiked to $1375 in a matter of hours.

It has been a very eventful few weeks for the precious metals markets. We have seen spot gold and silver rally to multi month highs of $1434 and $25.10 respectively. The main drivers for these rallies was the ongoing strife in Syria, which has since subsided . The market has also been fixated one "tapering", will he or won't he. Since Federal Reserve chairman Ben Bernanke’s initial comments on tapering back in June, the market has been heavily focused on one question: when will the unwinding of QE3 start?

Bloomberg 
By Alex Pashley - Aug 28, 2013 4:09 AM ET

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Published: MONDAY, AUGUST 26, 2013
Author:  By MICHAEL KAHN
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