Gold edges lower after Fed tapers by USD10 billion

               Gold prices edged lower on Thursday, after the Federal Reserve announced that it will taper its bond-buying program to USD65 billion a month following its policy meeting.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery fell to a session low of USD1,255.40 a troy ounce, before trimming losses to trade at USD1,256.90 during European morning hours, down 0.4%.

The April contract rallied 0.94% on Wednesday to settle at USD1,262.20 an ounce as ongoing turbulence in emerging markets saw investors flee riskier assets and move in to safe-havens.

Gold futures were likely to find support at USD1,248.00 a troy ounce, the low from January 28 and resistance at USD1,280.10, the high from January 27.

The Fed said Wednesday that it would reduce its monthly bond buying program by USD10 billion to a total of USD65 billion a month, in a widely anticipated decision.

The U.S. central bank said growth signals are encouraging, and the unemployment market shows improvement "on balance".

The Fed left unchanged its statement that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the central bank has previously said it would start to consider rate increases.

The Fed added it will keep a close eye on economic indicators before deciding to wind down its stimulus program even further.

The U.S. is to publish preliminary data on fourth quarter economic growth. The nation is also to release the weekly report on initial jobless claims and data on pending home sales.

Meanwhile, silver for March delivery fell to USD19.28 a troy ounce, the weakest level since December 31, before paring losses to trade at USD19.37 during early European hours. 

Elsewhere on the Comex, copper futures for March delivery fell 0.2% to trade at USD3.235 a pound, the lowest since December 9.

Data released earlier showed that China’s final HSBC Purchasing Managers Index fell to a six-month low of 49.5 in January from a preliminary reading of 49.6 and down from 50.5 in December.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. - Investing.com