Gold and Silver Stumble After FOMC Minutes

By Roger Baettig | January 03 2013 8:09 PM

Reuters

Gold coins from a treasure trove of gold and silver coins worth $500 million and recovered from a Spanish ship believed to be from the wreckage of the Nuestra Senora de las Mercedes, a ship sunk by the British Navy in 1804 as it returned from South America, are handled by a Spanish expert at an undisclosed warehouse in Sarasota, Florida in this handout photo released February 23, 2012.

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On Thursday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, fell $14.20 to settle at $1,674.60 per ounce, while silver (NYSEARCA:SLV) futures for March dropped 29 cents higher to close at $30.72.

Both precious metals took a pause after strong gains to start the year, but declined even harder as the Federal Reserve tries to keep the market guessing on its massive bond purchasing programs.

The newly released Federal Open Market Committee minutes show that policymakers are dividend about expanding the Fed’s balance sheet beyond 2013. Several members want to ease off the monetary easing gas pedal by the end of this year, sooner than expected.

The Federal Reserve explains, “Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet. One member viewed any additional purchases as unwarranted.”

By the end of the trading day, the SPDR Gold Trust (NYSEARCA:GLD) declined 1.21 percent, while the iShares Silver Trust (NYSEARCA:SLV) dropped 2.5 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) fell 3 percent and 4.6 percent, respectively. Meanwhile, Silver Wheaton (NYSE:SLW) and Hecla Mining (NYSE:HL) both fell nearly 4 percent.