Policy makers trimmed bond purchases for the fourth consecutive meeting last week. œSufficient underlying strength made the reductions œappropriate, Fed Chair Janet Yellen said today at a hearing of the congressional Joint Economic Committee. Bullion slumped 28 percent last year on concern the central bank would slow the pace of bond buying.
Gold futures for June delivery fell 1.5 percent to settle at $1,288.90 an ounce at 1:42 p.m. on the Comex in New York, the biggest decline since April 15.
Prices will have a œslow grind down and reach $1,050 by year-end as the U.S. economy strengthens, Goldman Sachs Group Inc. wrote in a report on May 5.
Gold jumped 70 percent from December 2008 to June 2011 as the Fed bought debt and cut interest rates to a record in a bid to boost the economy.