The price of gold rose ahead of a key meeting of the US Federal Reserve in which the officials will decide when to start withdrawing the massive monetary stimulus.
Investors believe that the US Federal Reserve will not withdraw its stimulus package, which resulted in a rise in gold prices. The gold for immediate delivery gained as much as 0.4 percent to $1,235.68 an ounce and was trading at $1,232.48 this afternoon, after falling 0.8 percent yesterday. Gold for February delivery rose 0.1 percent to $1,231.80 an ounce on the Comex in New York.
The prices of gold are down 26 percent this year due to concerns that the Federal Reserve will start curbing its $85 billion in monthly bond buying. This is the first time since 2000 that the gold prices will record a fall during a year.
Federal Reserve officials had indicated that they might start withdrawing its stimulus package as the US economy continues to shows sign of strong recovery. Economists are divided on the timing of the withdrawal. Some believe that the cuts might begin this week while other said that it will begin withdrawing its stimulus form March 2014.