Precious-gold Drops 1 Pct On Speculation Over Fed Tapering

Data showing flat U.S. consumer prices in November also pressured gold, but the lack of inflation pressures in the economy will probably not stop the Fed from scaling back its bond-buying program soon, analysts said. "While the prospect of an immediate taper seems to be diminishing for now, it seems only inevitable that the Fed will act sooner rather than later, and the longer-term investors are still being seen to reduce their exposure to gold as a result," said a trader at TD Securities' precious metals desk. Spot gold was down 0.9 percent at $1,228.54 an ounce by 1:52 p.m. EST (1852 GMT).

Will Gold Keep Falling?

or even lower. It doesnt help that supply is not working with the price of gold. Gold miners increased production in the third quarter, producing 4% more gold than they were last year, when prices were at their highest. How does that make sense? The more gold thats produced, the lower prices will fall because of its abundance. Demand isnt helping the situation either. India is the worlds biggest gold market, and it isn't buying as much as usual. The Indian government is partly at fault, as it raised excise duties and import payment restrictions.