Gold prices sink after Fed scales back stimulus

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Associated Press

Posted on March 19, 2014 at 1:01 PM

Updated Wednesday, Mar 19 at 1:02 PM

Gold prices are sliding after the Federal Reserve decided to scale back its support for the economy.

The April gold contract fell $17.70, or 1 percent, to settle at $1,341.30 an ounce Wednesday.

The Fed voted to trim its monthly purchase of bonds by $10 billion to $55 billion. The Fed also said a majority of its policymakers believe the central bank should raise short-term rates to 1 percent by the end of next year.

Both moves point to slightly higher interest rates in the future, which weakens the appeal of gold as an investment.

Most other metals also fell. April platinum fell an even $10 to $1,451.70 an ounce while June palladium fell $3.20 to $768.20 an ounce.

In other trading, wheat, corn and soybeans rose.

Crude oil rose.

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