Moderate losses for bullions following Fed statements

Gold drops for third straight session

Bullion prices ended moderately lower on Wednesday, 19 March 2014. Gold prices settled lower on Wednesday for a third session in a row, and fell even further after the Federal Reserve decided to continue to taper its bond-buying program as expected, but also said it won't rely on the employment rate to decide whether to hike interest rates. The central bank's decision came after the close of regular gold trading on Comex.

Gold for April delivery fell $17.70, or 1.3%, to settle at $1,341.30 an ounce on the Comex division of the New York Mercantile Exchange, after tallying a loss of 1.4%, or $20 an ounce, over the past two trading sessions. In electronic trading after the Fed announcement, gold futures traded at $1,333.50 an ounce.

May silver settled down nearly 4 cents, or 0.2%, for the session at $20.83 an ounce. It was at $20.72 in electronic trading.

As had been widely expected, the Fed said it'll continue to reduce the pace of its monthly asset purchases by a further $10 billion to a rate of $55 billion a month. At a press conference, Chairwoman Janet Yellen justified tapering the Fed's stimulus program while inflation is low by saying policy works on inflation only with very long lags. The economy is expected to be back to full employment by the end of 2016.

The U.S. dollar rallied, while U.S. Treasuries, the stock market declined .

In other news, there are rumors floating around Wednesday that another Chinese corporation is in default on an interest rate payment on its bonds. However, there has been no confirmation of such by China. It could limit consumer demand from the largest gold consumer in the worldChina. However, it could also prompt safe-haven demand for gold worldwide.

Today's economic data at Wall Street was limited to two data points. The fourth quarter current account deficit totaled $81.10 billion while the consensus expected the deficit to hit $87.60 billion. The third quarter deficit was revised to $96.40 billion from $94.80 billion. Separately, the weekly MBA Mortgage Index fell 1.2% to follow last week's decline of 2.1%.

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