Gold slips 1% on Fed minutes, firm dollar
Fears that central banks' money-printing policy to buy assets will stoke inflation has been a key driver in boosting gold, which rallied to an 11-month high in early October after the Fed announced its third round of aggressive economic stimulus.
U.S. gold futures for February dropped more than 1 percent to a low of $1,645.60 an ounce, its weakest in two weeks. Cash gold also fell to a two-week low of around
$1,645 an ounce, heading for its sixth week of loss.
"This is the first impact. So I am not sure how deep this news will affect the market yet. I guess the market will be held at around the $1,645 to $1,650 level," said Yuichi Ikemizu, branch manager for Standard Bank in Tokyo, adding that lower prices could attract buying from the physical sector.
"I don't really think this is the end of the gold rally. This is a temporary downside."
Gold ended up around 7 percent in 2012 - the 12th straight year of gains, making it one of the longest bull runs ever for a commodity. It has gained on rock-bottom interest rates, concerns over the financial stability of the euro zone, and diversification into bullion by central banks.
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