Gold extends decline as investors weigh fed comments

London, May 2. Gold today fell, extending the biggest drop in two weeks, as investors reduced holdings in bullion-backed exchange-traded products amid concern the Federal Reserve may scale back its stimulus program. Gold declined 0.2 per cent to USD 1,445.25 an ounce. The metal retreated 1.3 per cent yesterday, the most since April 15, when prices plummeted 9.1 per cent in the biggest drop since 1983. Silver also fell 0.2 per cent to USD 23.58 an ounce. The Fed said yesterday that it was ready to raise or lower its monthly asset purchases as economic conditions evolve, in contrast with a discussion of the timing of a reduction in the pace of buying at the central bank’s March meeting. Gold ETP assets fell to 2,272.28 metric tonnes, the least since October 2011. The euro fell against the dollar for the first time in five days as a euro-area report showed the region’s manufacturing industry contracted at a faster pace last month. Gold capped its worst month of losses since December 2011 in April after plunging into a bear market. Gold had rallied for 12 years through 2012 as central banks around the world including the Fed ramped up stimulus to spur growth. While prices are 7.4 per cent below the April 11 close of USD 1,561.45 that preceded the rout, they have rebounded from a two-year low of USD 1,321.95 on April 16 as coin and jewelry demand expanded from the US to China and India.