Gold: an overview of the market situation

Gold prices fell by about 1 percent , which was associated with a significant appreciation of the U.S. currency after the U.S. Federal Reserve lowered the volume again its monetary stimulus . Decline in value was also due to the fact that many investors began to take profits the previous session. Recall that yesterday Operations Committee on the Federal Open Market said it will cut bond purchases to $ 65 billion in February from $ 75 billion in January. The Fed also said that the program will continue to reduce purchases of bonds next month , confirming its strategy of rolling this program in small steps during each of the meetings , while the economic situation continues to improve. Add that Fed officials gave a mixed assessment of performance of the economy. On the one hand , the Fed said that data released since the December meeting , "indicate that the growth of economic activity has accelerated in recent quarters ." However, Fed officials called labor market indicators " mixed " , meaning probably disappointing December employment report . They also noted that the recovery in the labor market " has slowed ."

"There is nothing surprising in the fact that the reduction of QE will continue ," said Mitsubishi analyst Jonathan Butler. " Against the background of the absence of any major changes in the macroeconomic situation in the U.S., we continue to believe that by the end of the year , probably , this program will be completed ," the expert added. Recall that the reduction of QE is usually considered negative for gold prices. Gold fell 28 percent last year amid the improving economy and expectations that the Fed will curtail incentives.

Also today it was announced that the gold reserves in the SPDR Gold Trust increased yesterday by 2.10 tons - up to 792.56 thousand tons. But this figure is still close to the five-year minimum.

Little support gold prices provided Chinese purchases that are likely to weaken after the Lunar New Year, which is celebrated on January 31 , analysts say. We also add that the volume of trading on the Shanghai Gold Exchange was at 1.5 tonnes on Thursday , compared with 8.4 tonnes on Wednesday and 14 tonnes on Tuesday .

Cost February gold futures on the COMEX today dropped to $ 1242.10 per ounce.