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Gold prices declined moderately today , after weak U.S. data on orders for durable goods decreased optimism regarding the strength of the economy , reducing expectations for a further reduction in stimulus from the Fed.
The U.S. Commerce Department said that new orders for durable goods fell 4.3% in December from November to $ 229.3 billion, which is the second drop in three months , and was marked the steepest decline since July. The decrease was due to a decline in demand for civilian aircraft , which is a volatile category. But even excluding the transportation sector , orders for durable goods fell by 1.6 %, showing the biggest drop since March. Economists had forecast an increase of 2 % of orders for durable goods in December. The data indicate that consumers and businesses are still spending cautiously , despite signs that the U.S. economy is gaining strength in recent months of 2013. The report also showed that demand in November was weaker than previously thought. New figures showed that overall orders for durable goods rose 2.6% in the same month , instead of the previously voiced 3.4%. Orders excluding transportation were revised downward to 0.1 % increase instead of 1.2%.
Meanwhile, adding that traders begin to prepare for the announcement of the two-day meeting on Wednesday and evaluate possible courses of action with respect to bond-buying program the central bank. This meeting will be the last for the current Fed chairman Ben Bernanke . In this position, it will replace the current Vice Chairman Janet Yellen . Market analysts expect the Fed to cut its bond-buying program to a level of $ 65 billion from the current $ 75 billion . Recall that the central bank announced its first reduction of monthly purchases of bonds in December , citing an improving economy . Results of Fed meeting will be crucial for gold in the short term . Further reduction of stimulus in the U.S. could lead to new large-scale sales of metal , while the delay to minimize the program , on the contrary , provoke purchase. Given the considerable uncertainty in this matter , gold in the short term , is likely to trade without significant changes.
Cost February gold futures on the COMEX today dropped to $ 1251.50 per ounce.
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