Gold prices dropped one percent on news from the Federal Reserve that they would purchase less government debt than originally expected to stimulate growth. The price of gold has declined sharply in relation to a stronger dollar falling back from it’s high of $1380 an ounce earlier this month. The price of gold today hovered around $1322.00 an ounce.
On Wednesday analysts at MF Global said in a note to clients that, “Wall Street may have overplayed its expectations of quantitative easing.”
The Wall Street Journal mentioned that the Fed’s purchase of treasury bonds will most likely be in the few hundred of billions rather than up to a trillion as some analysts has anticipated. The news sent the dollar higher and strengthened the currency throughout its trading session.
U.S. FED authorities plan on meeting next week to discuss policy decisions which will impact the direction of the FED policies for the near future.