The central bank is holding off on increasing monetary accommodation unless the U.S. economic expansion falters or prices rise at a slower rate than its 2 percent target, according to minutes of the March 13 meeting released today. Gold has surged almost 90 percent since the end of 2008 as the Fed held borrowing costs at a record low and bought $2.3 trillion in housing and government debt.

“The Fed clearly expressed reduced interest on asset purchases,” said William O’ Neill, anUpper Saddle River, New Jersey-based partner at Logic Advisors, a commodity consultant. “We saw a knee-jerk reaction in the market after the potential for any kind of monetary-easing lessened.”

Gold for immediate delivery slumped 2 percent to $1,643.93 an ounce at 3:24 p.m. in New York. A close at that level would be the biggest loss since Feb. 29.

“We did not hear any concerns about rising inflation, and that was negative for gold, too,” O’Neill said.

Prices also retreated on concern that physical purchases are declining in India, the world’s biggest buyer.

The All India Gems & Jewellery Trade Federation said that members extended a strike for an 18th day to protest a levy on non-branded gold products. About 90 percent of jewelry stores across India were shut today, said Bachhraj Bamalwa, the federation’s chairman.

“Physical demand isn’t extremely robust, as a lot of people are waiting to see if they can buy at lower prices,” Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview.

On the Comex in New York, gold futures for June delivery fell as much as 2.4 percent in electronic trading, after settling down 0.5 percent to $1,672 at the close of floor trading.

To contact the reporters on this story: Debarati Roy in New York at droy5@bloomberg.net; Joe Richter in New York at jrichter1@bloomberg.net

To contact the editor responsible for this story: Patrick McKiernan atpmckiernan@bloomberg.net

http://www.bloomberg.com/news/2012-04-03/gold-may-extend-gain-as-u-s-growth-offsets-weaker-india-demand.html

• Oil Prices U.S. Dollar And Interest Rate Expectations Could Push Gold Higher Next Week – Analysts   (2016-01-30 03:49:19)
• Price of Gold in 2016: Will It Break Out or Melt Down?   (2016-01-19 05:33:39)
• Gold Sees Decent Short-Covering Bounce, Some Technical Buying   (2015-12-22 04:50:39)
• PRECIOUS-Gold falls as looming U.S. rate rise lifts dollar Read more at Reutershttp://www.reuters.com/article/global-precious-idUSL3N14334F20151214#K113K1O55Bq13ITK.99   (2015-12-14 18:49:37)
• PRECIOUS-Gold falls as looming U.S. rate rise lifts dollar Read more at Reutershttp://www.reuters.com/article/global-precious-idUSL3N14334F20151214#K113K1O55Bq13ITK.99   (2015-12-14 18:49:32)
• Gold Poised for Longest Weekly Slump Since September Before Data   (2014-04-04 09:52:32)
• Gold Bulls Run for $1,400 as Ukraine Turmoil Fuels Haven Demand    (2014-03-04 09:36:22)
• Gold to Oil Climb as Commodities Reach Six-Month High on Ukraine    (2014-03-04 09:35:49)
• Gold Fix Study Shows Signs of Decade of Bank Manipulation   (2014-03-01 08:47:36)
• Gold Rises to 17-Week High on Signs U.s. Economy Sputters    (2014-02-26 08:29:25)