Gold sharply down as Fed ends bond buying

CHICAGO - Gold futures on the COMEX division of the New York Mercantile Exchange fell sharply on Wednesday after the US Federal Reserve announced the end of its bond- purchasing program, cutting demand for the precious metal as safe- haven asset.

The Fed decided Wednesday to end its six years of pump-priming, as it sees the economy is improving on track from the worst financial crisis in decades. It also pledged to keep low interest rates in the longer run to nurture the hard-earned recovery.

Gold headed for biggest drop in three weeks in electronic trading following Fed's statement, as the end of the Fed's quantitative easing, or QE, has dampened gold buying appetite.

Before the release of the Fed announcement, the most active gold contract for December delivery lost $4.5, or 0.37 percent, to settle at $1,224.9 per ounce in floor trading.

Analysts believed that the Fed will raise the federal funds rate in the middle of 2015, or even later.

Silver for December delivery gained 3.8 cents, or 0.22 percent, to close at $17.264 per ounce. Platinum for January delivery gained $2.9, or 0.23 percent, to close at $1269.2 per ounce.

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