Fed minutes from June meeting pull down gold prices

Gold prices were driving down on Thursday in the aftermath of indications that the central bank of the U.S. is not considering deploying more monetary stimulus programs in the short term, Reuters reports.

Consequently, the value of the U.S. dollar gained, which pushed down the price of the yellowish metal.

On Wednesday, the U.S. Federal Reserve released minutes from its June meeting. The discussion noted the body's willingness to purchase more assets as a strategy of spurring the globe's largest economy. But the economy first needs to weaken before the body would consider that move.

"Investors remain cautious on indications that the Fed is unlikely to launch additional monetary stimulus until U.S. economic conditions weakened further," precious metals analyst Suki Cooper with Barclays Capital told Reuters. "Gold has been pulled and pushed on the back of expectations of further quantitative easing, and additionally remains under pressure from the stronger U.S. dollar."

At 2:23 p.m. on Thursday, gold prices dropped 0.56 percent, an $8.80 loss to $1,566.90 per troy ounce.

This year, as the yellowish metal drives toward a 12th consecutive year of annual gains, has seen bullion tracking the monetary policies of central banks throughout the world. Now more than halfway to the end of 2012, the price of gold is nearing its starting point, Reuters reports.

One strategist said a third round of quantitative easing, more colloquially known as QE3, remains a possibility. Should that scenario ensue, the precious metal would respond accordingly, the strategist said.

"While the prospects of QE3 taking place on some time scale are still reasonable, this is likely to remain the primary focus of the gold market," strategist David Jollie with Mitsui Precious Metals told Reuters.

Euro's swoon, dollar's rise press down gold

Pushing up the dollar - and down the yellowish metal - on Thursday was economic information indicating new applications for jobless benefits dropped to their lowest amount in 48 months. That helped the world's reserve currency maintain its highs of two years against the shared currency of the European Union.

The two-year lows achieved by the 17-nation monetary unit applied pressure against the yellowish metal, The Wall Street Journal reports.

While bullion dropped on Thursday, so did the interest of traders and investors in the precious metal.

"We have seen very little in the way of physical demand lately and even the usual Asian buyers have been notably absent," traders told The Wall Street Journal.

Prediction of grandeur

But, despite the poor performance as of late for the yellowish metal, the next five-plus months will see it surge in value 22 percent to push past its record price, a high-flying fund manager told Bloomberg during an interview.

Sprott Inc. founder and chair Eric Sprott told the news source that abundant amounts of debt throughout the world will slow down the world's forward progress and the pace of global development and growth will slacken.

He said minimized demand for the yellowish metal is something that he simply cannot bring himself to fathom. He also said he was not optimistic about the abilities of the powers-that-be to grasp ahold of the threats posed by debt.

Established on September 7 of last year, the all-time high price for gold is $1,923.70 per troy ounce.

The 67-year-old fund manager, while noting that the yellowish metal has outperformed all worldwide financial markets since 2000, forecast gold to set new record prices by the end of this year.

"We have a fundamental problem in the sovereign and banking system in the world," Sprott told the news source. "Probably nobody has any conception of how bad it is."