Congo’s South Kivu governor suspends mining operations in province
The decision will hit artisanal miners of metals such as gold and tin hard, as they are the region's dominant producers.
Gold for February delivery lost $35 to trade at $1,64 an ounce in after hours trade on the New York Mercantile Exchange on Thursday, after the US Federal Reserve dropped a bomb about its ultra-loose stance on monetary policy.
For the first time since the financial crisis hit in 2008, the US central bank has signaled that its program of quantitative easing – to keep interest rates near zero and flood financial markets with cheap money – may end sooner rather than later.
Several Fed members prefer QE3, the latest round of asset purchases that amount to a staggering $85 billion a month, to stop “well before the end of 2013.”
That would mark the end of Fed actions – and similar programs in Europe and Japan – that have been a massive boon for gold.
The Fed’s near-zero interest rate policy and bond purchases under QE1 kicked off on 16 December, QE2 followed in August 2010 and September’s third round was designed to be open ended.
On 15 December 2008 an ounce of gold cost $837.50.
Before the latest slip, it constituted a doubling in value thanks to the Fed.
Today’s relatively modest pullback is another indication that the Fed’s actions and pronouncements are having less of an effect on the price of gold.
In the past any mention or even a hint of increased or extended quantitative easing would send investors piling into gold. Anything to the contrary and they would run for the exits.
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