Gold declines amid Fed announcement

The price of various gold contracts decreased on June 21, as market participants including precious metals buyers were less than encouraged by the policy statements made by the U.S. Federal Reserve.

August gold declined to as low as $1,598.10 an ounce on the Comex division of the New York Mercantile Exchange before paring these losses to reach $1,601.80 an ounce by 06:08 GMT, according to Reuters. Cash gold dropped by $4.48 per ounce to $1,600.90.

August Comex gold had fallen to $1,600.30 by 06:18 EDT, Reuters reports. At the time, spot gold was trading 0.4 percent lower at $1,599.19 an ounce.

Markets were roiled by Federal Reserve Chairman Ben Bernanke's statements that the central bank would extend an existing bond program with the intention of lowering long-term borrowing costs and stimulating the economy, which has been named "Operation Twist." The government official did not announce a new round of quantitative easing.

"I think people's estimation of the probability of QE III was pretty low, but now we're seeing a bit of an unwind in gold," Credit Suisse analyst Tom Kendall told the news source.