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Gold prices sink after Fed scales back stimulus

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News,Business,Federal Reserve

Gold prices slid Wednesday after the Federal Reserve decided to scale back its support for the economy.

The April gold contract fell $17.70, or 1 percent, to settle at $1,341.30 an ounce.

The Fed voted to trim its monthly purchase of bonds by $10 billion to $55 billion. The Fed also said a majority of its policymakers believe the central bank should raise short-term rates to 1 percent by the end of next year.

Both moves point to slightly higher interest rates in the future, which weakens the appeal of gold as an investment.

Most other metals also fell. April platinum fell an even $10 to $1,451.70 an ounce while June palladium fell $3.20 to $768.20 an ounce. Copper was the exception, with the contract for May rising 4 cents to $2.99 a pound.

In other trading, wheat for May jumped 23 cents, or 3 percent, to $7.15 a bushel. Corn for May inched up 2 cents to $4.87 a bushel, and soybeans for the same month rose 13 cents to $14.32 a bushel.

In oil and gas trading:

— Benchmark crude oil gained 67 cents to close at $100.37 a barrel.

— Heating oil fell a penny to $2.90 a gallon.

— Wholesale gasoline fell 3 cents to $2.87 a gallon.

— Natural gas rose 3 cents to $4.48 per 1,000 cubic feet.

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