Gold retreats as Fed's minutes lack additional stimulus signal

Gold on Thursday dropped to the lowest level in almost two weeks, as the US Federal Reserve’s latest policy minutes didn’t show the central bank closer to additional stimulus actions, boosting the dollar.

August-delivery gold fell 1.07 per cent to $1,559.70 an ounce, the lowest level since June 29. Silver also declined 2.06 per cent to $26.58 an ounce.

Policy makers considered the risk that more easing might pose, even as conditions had become less supportive of the economy on Europe's debt crisis, according to the minutes of the Federal Open Market Committee's, released yesterday.

Gold dropped 3.1 per cent on June 21 after the central bank didn't decide to buy more debt, and instead extended a program of replacing short-term bonds with longer-term debt.

The Bank of Japan on Thursday refrained from adding monetary stimulus, bolstering its asset-purchase fund, while cutting a credit-loan facility by the same amount.

Holdings in the SPDR Gold Trust, the biggest exchange- traded product backed by bullion, were at 1,271.24 metric tonnes, the least since May 31.