Gold fell for the third consecutive day today as the US dollar rose following the Fed’s decision to hold off on QE3.
The US Federal Reserve chairman Ben Bernanke yesterday cut the economic growth forecast, but stopped short of introducing another round of quantitative easing. The Fed instead extended Operation Twist, which aims to lower long-term borrowing costs by swapping short-terms bonds with long-term debt. Meanwhile, a report showed that China's manufacturing PMI contracted in June, indicating that global problems were slowing China's huge export-dependent manufacturing sector.
The HSBC manufacturing PMI dropped to 48.1 in June from 48.4 in the prior month. German manufacturing PMI for June also saw a surprise drop to 44.7 from 45.2 month-on-month, indicating that the peripheral eurozone nations problems have started to hurt the core.