US GOLD PRICE

Comex struggles in stronger dollar environment

Gold futures fell in the US on Thursday after the dollar rebounded in the wake of the Federal Reserve's decision to maintain its quantitative easing programme and lower-than-expected eurozone inflation figures. Gold prices for December delivery on the Comex division of the New York Mercantile Exchange were last down $23.10 at $1,326.20 per ounce. Trade has ranged from $1,322.10 to $1,343.00.

The US Federal Open Market Committee (FOMC) said on Wednesday that it will continue its $85 billion-per-month bond buying stimulus programme until the outlook for the labour market improves substantially in a context of price stability.

Economic activity continues to expand at a "moderate pace", the FOMC said, adding that "indicators of labor market conditions have shown some further improvement, but the unemployment rate remains elevated".

"Following publication of the statement after the FOMC meeting, the US dollar appreciated against the euro, thus weighing on precious metal prices" Commerzbank said in a note.

"Clearly, some market players expect the Federal Reserve to scale back its bond purchases in the near future. That said, the Fed made virtually no changes to its statement that would justify this expectation" said the broker, adding that its economists still believe that the Fed will announce a reduction in its bond purchasing programme in March or April next year.

Accommodative measures from the US central bank are unequivocally supportive of gold because extra liquidity tends to debase the dollar and create future inflationary risks.

"The Fed's decision was somewhat bearish of gold for there were hopes amongst the gold cognoscenti that the Fed might err modestly more accommodative. It did not, and that has given gold an offer in dollar terms" Dennis Gartman, editor of the Gartman Letter, said.

Elsewhere, eurozone data this morning disappointed. The GfK German consumer climate number came in below forecast at 7 points and retail sales were down 0.4 percent, missing the forecast for a rise of 0.5 percent

The eurozone unemployment rate for September at 12.2 percent was 0.2 percentage points higher than forecast, the CPI flash estimate at 0.7 percent missed the expected 1.1 percent and Italian preliminary CPI for the same month at -0.3 percent undershot the forecast 0.4 percent.

In wider markets, the dollar was nearly a full cent stronger at 1.3641 against the euro, while Germany's DAX and France's CAC-40 were up 0.07 percent and 0.38 percent respectively. In Asia, the Nikkei and Hang Seng finished down 1.2 percent and 0.42 percent.

As for the other precious metals, Comex silver prices for December delivery were down 82.8 cents at $22.155 per ounce. Trade has ranged from $22.145 to $22.690.

Platinum prices for January delivery on the Nymex were down $17.60 at $1,462.30 per ounce and Palladium prices were at $742.65, down $6.85.