FOMC Keeps Policy Unchanged; Gold is Falling –FOMC Meeting

As expected there werent any major headlines coming out of the recent FOMC
meeting, which was the second Federal Open Market Committee meeting for 2012.
The Fed stated it sees signs of recovery in the U.S. economy in recent month and
thus decided to keep the current plan unchanged including: keeping rates low and
not introducing additional stimulus plans for now. Currently gold price is
tumbling down. The FOMC referred to the progress of the U.S. labor market; the
recent non-farm employment report is backing up this claim. The Fed decided to
continue with its program to extend the average maturity of its holdings of
securities as announced in September, without introducing any additional
stimulus plans. The U.S. inflation slightly rose last month to an annual rate of
2.3% (for the core CPI). This isnt something that should bother the FOMC for the
time being. The FOMC will maintain its pledge of keeping the low interest rates
at 0 to 0.25% at least until late 2014. This news may drag down bullion prices
and also further strengthen the U.S dollar. Following the release of this
statement and the recent update on the rally in U.S retail sales during last
month,