Gold Gets Slammed As Fed Hints Tapering

Gold............

Gold futures got slammed below the crucial mark of $1340 an ounce in the Asia electronic trades today after the Federal Reserve Chairman Ben Bernanke revealed that the central bank may start to scale back its asset purchases later this year if the economy continues to strengthen.
The Fed, which kept monetary policy on hold after a two-day meeting, signaled greater optimism about the economy, forecasting that the unemployment rate could fall to 6.5% by 2014, one year sooner than the central bank had previously estimated.
The Fed’s newly revised forecast and Bernanke’s comments slammed U.S. financial markets. Stocks on Wall Street ended sharply lower and the 10-year Treasury yield surged to 2.33%, its highest level since March 2012.
Bernanke, speaking in a news conference after the Fed meeting, tried to decouple a tapering of its asset purchases from any hike in short-term interest rates. The Fed has said it would keep rates close to zero so long as the jobless rate, now at 7.6%, was above its 6.5% threshold.
And the Fed chairman stressed the bank won't start to hike rates even once its economic targets are met. He said the bank has to be convinced the economic recovery is on a solid upward path before it starts to pull back.
US August bullion futures were smashed to hit the low of $1338.6 an ounce on COMEX division of New York Mercantile Exchange.
MCX August gold futures may open today’s session near Rs 27600 levels with support around Rs 27400-300 levels.
Source by Commodity Insights