Gold Extends Losses On Fed Uncertainty

(RTTNews) - Gold was extending losses Tuesday morning with the US dollar recovering from its recent losses amid uncertainty over the Federal Reserve's monetary policy.

Gold for December delivery, the most actively traded contract, lost $10.90 to $1,316.10 an ounce. Yesterday, gold settled marginally lower after investors resorted to profit taking while mulling the prospect of a cut to the Federal Reserve's $85 billion monthly bond-buying program in October.

Last week, St. Louis Fed President James Bullard said the central bank may consider scaling down its asset purchase program in October if the economy showed any significant signs of recovery. Earlier, the Fed decided against any cut to its quantitative easing program, citing concerns that Congress will bicker about raising the debt ceiling and as well on sluggish growth in the jobs market.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, inched down to 909.59 tons from 910.19 tons.

Meanwhile, the U.S. dollar was leveling off from its 8-month low versus the euro, the Swiss franc and sterling, while trading flat against the yen.

In economic news from the euro zone, German business confidence continued to improve in September, but remained below economists' expectations, reports said citing survey results from the Ifo Institute. The business climate index edged up to 107.7 in September from a revised reading of 107.6 in August. The expected reading was 108. The Ifo business expectations index rose to 104.2 in September from 103.3 in the previous month. This was forecast to rise to 104.

Elsewhere, the price of silver was moving lower and platinum little changed in morning deals.

From the U.S., the Standard & Poor's will release the results of its house price survey for July at 9 a.m. ET. The house price index based on the survey is expected to increase by 0.8 percent month-over-month on a seasonally adjusted basis, while annually the index is expected to have risen by 12.4 percent.

A little later, the Conference Board will release the results of its consumer confidence survey for September. The consensus estimates call for a decline in the index to 80 from 81.5 in July.